Less than two weeks before the beginning of 2026, the scenario of governmental paralysis in Israel is moving from a possibility to the circle of direct danger, among sharp warnings issued by Yehali Rotenberg, the General Accountant at the Ministry of Finance, about the repercussions of operating without an approved budget.
The Israeli newspaper "Calcalist" revealed that a formal letter sent by Rotenberg to the ministries and government units depicts a bleak picture of state operations if it continues to work with a transitional budget, warning of an unprecedented financial gap that could "practically paralyze government activities".
Historic gap and a budget that does not reflect reality
According to "Calcalist," Rotenberg stressed in his letter titled "Government Activity without an Approved Budget" that the legal framework of the transitional budget for 2026, which is based on the "1/12" mechanism of the 2025 budget plus limited inflation adjustments, is no longer suitable for the actual obligations of the state.
He pointed to a financial gap estimated at about 55 billion shekels (about 17.15 billion dollars), which is equivalent to about 2.6% of the gross domestic product, a gap considered the highest in the history of transitional budgets, compared to previous gaps ranging between 15 and 20 billion shekels only, according to the newspaper.
Severe reduction and return to the bare minimum
"Calcalist" quoted Rotenberg saying that working without an approved budget "does not conform with the structure of expenditures, nor with the level of services actually provided," warning that ministries will be forced to "reduce their activity and focus only on the bare operational minimum required to maintain continuity of vital services."
He added that this situation would lead to a sharp decline in the government's implementation capacity, with direct repercussions on the quality of services provided to citizens.
In unprecedented detail, Rotenberg explained that the most dangerous scenario is one in which the budget is not approved for a large part of the year, which he described as "a very dangerous scenario."
He warned of delays or freezing, and perhaps stopping, payments to government suppliers not directly linked to essential services, in addition to the near impossibility of taking on new employees or expanding the workforce, including a freeze on spending estimated at about 5 billion shekels (about 1.56 billion dollars).
A blow to education and social support
According to the paper, the General Accountant warned of tampering with government support reaching 35 billion shekels (about 10.91 billion dollars), including budget grants for local authorities, classroom construction, and the suspension of funding calls for various bodies.
He also indicated that not approving the budget would prevent offering support under Article 3 A of the Budget Principles Act, a path through which religious institutions, cultural and sports bodies, and youth movements are funded, with a value estimated at about 4 billion shekels (about 1.25 billion dollars).
The General Accountant added that all new projects, contractual commitments, and new government initiatives would be frozen or postponed.
"Calcalist" revealed that Rotenberg intends to publish detailed strict guidelines next week to regulate spending during this sensitive phase, and the newspaper noted that the General Accountant is the only government official who has direct legal authority, which enables him to "completely shut off the faucet" to any ministry that does not comply with his instructions, especially in the absence of an approved budget.
Political crisis under a financial guise
According to the newspaper, the government approved the budget project about two weeks ago, but it will not come into effect before mid or late March 2026, meaning the government will operate without a clear financial framework for at least a quarter of a full year.
"Calcalist" warns that not approving the budget by March 31, according to "Basic Law: State Economy," automatically leads to the dissolution of the Knesset and calling for elections, adding a serious political dimension to the existing financial crisis.
In conclusion, the letter—as conveyed by "Calcalist"—paints a highly negative scenario that goes beyond temporary accounting restrictions, threatening to undermine the Israeli government's ability to operate, and putting public services, social support, and political stability to an unprecedented test as 2026 begins.
