After months of heated negotiations, the Ministry of Finance and Ministry of Defense have reached agreement on providing budget supplements for 2025-2026, sources have informed “Globes.” Following the agreement, the Ministry of Finance will bring forward opening the 2025 state budget through a legislative process in the Knesset next week.
The agreement includes additions of tens of billions of shekels to cover the costs of the operation in Iran, the continuation of the fighting in Gaza beyond what was planned in the original budget, additional budgetary overruns by the IDF since the start of the year, and “strengthening additions,” for 2026 in response to the Nagel Committee’s recommendations to increase the defense budget.
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The parties agreed on an extra NIS 42 billion for the defense budget for 2025 and 2026. They also agreed that the Ministry of Defense would form a long-term strengthening plan from 2027.
Until a few weeks ago, the differences between the Ministry of Finance and the Ministry of Defense totaled NIS 45 billion for the various issues: NIS 30 billion for covering the costs of the fighting so far and another NIS 15 billion for strengthening and building the IDF, including readiness for the next potential round against Iran.
As part of the agreement, the IDF will need to be stricter about paying reservists for leave. As part of the talks, senior Ministry of Finance officials expressed concern about the ineffective use of reservists: “Everyone knows dozens of stories about soldiers who sit at bases without significant missions or do reservist work from home.”
The budget additions to the Ministry of Defense for next year will already be anchored in the amended budget for 2025. Beyond the desire to plan ahead, it is also about preparing for a scenario in which the government does not pass the 2026 state budget on time.
Published by Globes, Israel business news – en.globes.co.il – on July 17, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
