Can Israel afford to wage war?

In the next few weeks Binyamin Netanyahu, Israel’s prime minister, hopes to gain final parliamentary approval for an emergency war budget. It includes more cash for settlers in the West Bank, as well as for religious schools, where teenagers study the Torah rather than science—part of an attempt to unite his fissiparous political coalition. And it also contains a startling break with the past. Everyday welfare spending (long generous in Israel, owing to its socialist foundations) will be slashed in order to fund the country’s armed forces. The military budget will almost double from 2023 to 2024. Israel’s unwritten social contract, which has for 70-odd years promised both a generous welfare state and a fearsome military, is under threat.

Despite continuing discussions about a ceasefire, Mr Netanyahu has been clear that any pause will be temporary. Even if a ceasefire ends up being extended or he leaves office, there is widespread political support for a mightier military. At the same time, the war is proving more expensive than expected. Between October and December Israel’s economy shrank by a fifth at an annualised rate, compared with the previous three months—more than twice the contraction predicted by the central bank. In the same period, over 750,000 people, or a sixth of the labour force, were away from work, many of them evacuees or reservists. Last month Moody’s, a rating agency, downgraded the country’s credit rating for the first time ever. All this raises a question. Can Israel afford to wage war?