Netanyahu and Smotrich Meet Over Israel’s 2026 Budget Amid Approval Battle | 23 Nov 2025

Netanyahu and Smotrich Hold Key Meeting on Israel’s 2026 Budget Amid Approval Challenges

On 23 November 2025, Israel entered a critical political phase as Finance Minister Bezalel Smotrich and senior financial officials presented the 2026 state budget and planned economic reforms to Prime Minister Benjamin Netanyahu.

According to Smotrich’s office, these measures aim to sustain economic growth, curb inflation, and address rising housing costs. The cabinet is scheduled to vote on the budget on 4 December, and by law, the Knesset must approve it by the end of March, or Israel could face new elections.

Political tensions within Netanyahu’s government have made approval more complex. Issues such as exemptions from military service for ultra-Orthodox communities and students, alongside coalition divisions, have intensified disagreements. Experts warn that failure to pass the budget could trigger political instability and potentially pave the way for early elections.

Smotrich emphasized that fiscal policy must remain separate from political disputes and based on long-term economic principles, rather than short-term political gains.

Potential Outcomes

If approved: Netanyahu could solidify his political base and ensure continuity of economic growth.

If rejected: The government’s stability could be jeopardized, opening the door for an electoral crisis.

Adding to the complexity, Smotrich has proposed adjustments to defense spending, which has created tension between military needs and fiscal priorities. Critics view this either as an effort to prioritize economic stability or as a political maneuver to consolidate influence within the government.

Ultimately, the Netanyahu-Smotrich meeting is more than just a budget discussion; it represents a critical political test. A successful passage would strengthen Israel’s government and economic outlook, whereas failure could trigger a new election cycle, making the outcome pivotal for both Israel’s politics and economy.