With less than two weeks until the start of 2026, the scenario of government paralysis is moving from a possibility to an immediate danger. This follows a sharp warning from the Accountant General in the Ministry of Finance regarding the consequences of operating without an approved budget.
An official letter sent by the Accountant General to government ministries and units paints a bleak picture of state operations if work continues under a transitional budget. The letter warns of an unprecedented financial gap that could “practically paralyze government activity.”
A Historic Gap and a Budget That Doesn’t Reflect Reality
In his letter titled “Government Activity Without an Approved Budget,” the Accountant General emphasized that the legal framework for the 2026 transitional budget, based on a “1/12” mechanism from the 2025 budget plus limited inflationary adjustments, is no longer suitable for the scale of the state’s actual obligations.
He pointed to a financial gap estimated at approximately 55 billion shekels (about $17.15 billion), equivalent to about 2.6% of the GDP. This gap is considered the largest in the history of transitional budgets, compared to previous gaps that ranged between only 15 and 20 billion shekels.
Severe Cuts and a Return to the Bare Minimum
The Accountant General stated that operating without an approved budget “does not align with the structure of expenditures, nor with the level of services actually provided.” He warned that ministries would be forced to “reduce their activity and focus only on the minimum operational level required to maintain the continuity of vital services.”
He added that this situation would lead to a sharp decline in the government’s executive capacity, with direct repercussions on the quality of services provided to citizens.
In an unprecedented detail, the Accountant General explained that the most dangerous scenario would be the failure to approve a budget for a large part of the year, which he described as “an extremely dangerous scenario.”
He warned of delays, freezes, or possibly the stoppage of payments to government suppliers not directly linked to essential services. He also noted the near impossibility of hiring new employees or expanding the workforce, including a freeze on estimated spending of about 5 billion shekels (approximately $1.56 billion).
A Blow to Education and Social Support
The Accountant General warned against harming government support amounting to 35 billion shekels (about $10.91 billion). This includes budget grants to local authorities, classroom construction, and the suspension of funding calls for various bodies.
He also indicated that the failure to approve a budget would prevent the provision of support under Article 3A of the Budget Foundations Law. This is the channel through which religious institutions, cultural and sports bodies, and youth movements are funded, with an estimated value of about 4 billion shekels (approximately $1.25 billion).
The Accountant General added that all new projects, contractual commitments, and new government initiatives would be frozen or postponed.
It was revealed that the Accountant General intends to publish detailed, strict instructions next week to regulate spending during this sensitive phase. The Accountant General is the only government official with direct legal authority, giving him the ability to “completely shut off the tap” for any ministry that does not comply with his instructions, especially in the absence of an approved budget.
A Political Crisis with a Financial Cover
The government approved a draft budget about two weeks ago, but it will not come into effect before mid or late March 2026. This means the government will operate without a clear financial framework for at least a full quarter of the year.
A warning has been
