Bbabo NET

Economics & Business News

Treasury Auditor General: Moody's decision to downgrade Israel's credit rating was professional

The Auditor General of the Ministry of Finance, Yaeli Rotenberg, commented for the first time at a briefing on the painful decision for Israel by the Moody's rating agency to downgrade the government's credit rating. Unlike Finance Minister Smotrich, who declared the decision of financial analysts a “political manifesto,” the Ministry of Finance expert believes that Moody’s decision was professional, although the Ministry of Finance does not agree with it and considers the assessment of the risk of a full-scale war in the north to be overestimated.

The chief auditor of the Ministry of Finance is responsible for communication with rating agencies. Yaeli Rosenberg flew to the United States and made every effort to prevent the blow to the Israeli economy that would come with a downgrade of the government's credit rating and a negative outlook for the future. At the briefing, he did not accuse American financiers of political bias and said that “from their point of view they made a professional decision, although we do not understand on what basis it was” and “includes elements that, in our opinion, were given exaggerated weight.”

The chief auditor of the Ministry of Finance refused to comment on the statement by Finance Minister Smotrich, which, according to many economists, threatens to worsen the consequences of Moody's decision. Rotenberg said that he “does not evaluate the minister,” and he does not consult with him before saying anything.

Moody's attributed the downgrade of the Israeli government's credit rating to the continuation of the war with Hamas and the lack of any clear plans to end it, which "increases political risk for Israel, weakens its executive and legislative institutions and its fiscal capacity for the foreseeable future."

The report emphasized precisely the uncertainty of the prospects, the lack of a long-term plan “that would fully restore and, over time, strengthen Israel’s security.” From this it was concluded that “the institutions of the executive and government (in Israel) are weaker than previously thought.” The negative outlook is based on the continued risk of a difficult and destructive war with Hezbollah.

Smotrich said in response that Moody's decision "has no serious economic justification, it is entirely a political manifesto based on a pessimistic and false geopolitical picture of the world, which reflects a lack of faith in Israel's defense and national strength and, apparently, also a lack of faith in justice our way against our enemies."

Treasury Auditor General: Moody's decision to downgrade Israel's credit rating was professional