01.07.2026 08:50
Prime Minister Benjamin Netanyahu and his team's failure to achieve their goals against Iran, along with the prolonged conflicts, have cornered Israel economically. The Israeli military, demanding a record increase in the defense budget, has brought the country to the brink of a major crisis as the Ministry of Finance opposes it, calling it 'unreasonable'.
The expected regime change in Tehran has not occurred, and the prolongation of occupation processes in the Middle East has made the financial cost of the war unsustainable for Israel. According to a report by one of Israel's leading newspapers, Yedioth Ahronoth, the cash-strapped Israeli army has requested an urgent additional budget from the government.
STATE OF EMERGENCY IN ISRAELI ARMY AND RECORD BUDGET DEMAND
According to the details of the report, the Israeli army demands an increase in the current defense budget of $38.9 billion to $49.5 billion. While the Defense Ministry pressures the government to raise spending to a record level in Israeli history, the army's current situation has been highlighted with these striking statements:
"The Israeli army, which has been conducting attacks on the territories of 6 different countries for about 3 years, admitted that it is struggling to operate with the current budget, that it has been forced to dismiss reserve soldiers as a result, and that it now avoids high-cost military operations."
FINANCE MINISTRY FINDS REQUESTED FUNDS EXCESSIVE
A very strong objection to this historic budget request from the army came from the Israeli Finance Ministry. Officials from the Finance Ministry, describing the request from the Defense Ministry and the army as "excessive and unreasonable," stated that such an increase would definitely "not happen."
The ministry warned that such a massive additional fund allocated for defense spending would lead to very serious cuts in civilian spending and would significantly negatively impact Israel's international credit rating.
AUSTERITY ATTEMPTS FAILED
Although the army has tried to implement austerity measures due to financial pressures, these steps have proven insufficient. The Israeli army, which had previously set a target to reduce the number of reserve soldiers from 60,000 to 40,000, has only been able to reduce this number to 64,000 after an intense period of conflict involving 120,000 reserve soldiers serving simultaneously. While the defense budget for 2026 was set at $30.3 billion in January, this figure was already revised to $38.9 billion in March due to rising costs.
NETANYAHU WILL MAKE THE FINAL DECISION
Israeli security officials continue to argue that large territories in Gaza and Lebanon are under occupation and that this budget increase is necessary to sustain the military presence. Prime Minister Benjamin Netanyahu will have the final say in the budget impasse, which has turned into a crisis between the two ministries. The decision, expected in the coming days, will directly affect both the country's war strategy and its economic future.