The clash over the defense budget: "This is not Sparta, this is a mess"

The government is expected to approve an addition of about 40 billion shekels to the defense budget, inflating it to 184 billion shekels in 2026. The decision was reached between Prime Minister Netanyahu and Finance Minister Smotrich amid a crisis of trust with the Treasury, which claims a loss of control over public funds. The defense establishment warns of production line stoppages in defense industries due to a debt of 15.5 billion shekels.

The government is expected to approve a massive addition of about 40 billion shekels to the defense budget, inflating it to 184 billion shekels in 2026 – the second largest ever. The principled decision was reached between Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich after months of procrastination and a deepening crisis of trust between the defense and finance ministries. The Treasury sees the defense budget as a "black hole" and criticizes the management skills of Defense Ministry Director General Amir Baram, warning that the defense establishment is losing control over public funds and endangering the economic future of Israeli citizens. On the other hand, the defense establishment is desperate for money: in the coming weeks, several production lines for missiles and shells in the defense industries may shut down due to a lack of funding for new orders. The debt accumulated by the Defense Ministry to the three largest defense industries is estimated at 15.5 billion shekels: about 5.5 billion shekels to Israel Aerospace Industries, about 7 billion shekels to Rafael, and about 3 billion shekels to Elbit Systems. The debt is already causing damage: Israel Aerospace Industries moved to a negative cash flow of about $795 million in the second quarter. The defense establishment is also awaiting approval to accelerate procurement plans based on a multi-year additional budget of 350-400 billion shekels, partly to deal with the possible cancellation of US defense aid in 2028. On the agenda are orders for Apache and CH-53K helicopters, F-15IA and F-35 fighter squadrons, and unmanned vessels. The article quotes a senior defense official saying: "This is not how Sparta operates. This is how a mess operates."