Ground Forces will have to cut NIS 1 billion shekels ($267.3 million) of their 2012 budget as part of the overall defense budget cuts, Yedioth Ahronoth reported Tuesday.
The decision has prompted a series of cutbacks on acquisitions and training, which military sources said could impede the army's force-portance over the next few years.
GOC Army Headquarters Major-General Sami Turgeman has reportedly completed his emergency cutbacks plan, declaring a series of austerity measures regarding training, acquisitions and warfare development.
The Army Headquarters would have to cut nearly two-thirds of its NIS 300 million ($8.25 million) domestic acquisitions budget, which may mean that the IDF would have to default on pending deals with Elbit
Systems, the Israel Military Industries, or Rafael Advanced Defense Systems.
The cut will impede existing deals, as well as the development and acquisition of future proactive defense systems, such as Rafael's Windbreaker tank defense system.
The defense establishment's Administration for the Development of Weapons and the Technological Industry (Maf'at) will also have to suffer a cut of several million shekels to its annual NIS 800 million ($214 million) budget.
Maf'at sources warned that the current budget was the administration's "red line."
The budget cuts are also expected to have what has already been described as a detrimental effect on the Reserves: The Ground Forces' reserve deployment was initially allotted NIS 1.5 billion ($401 million) for 2012, but the budget cuts will apparently force the military to focus on regular forces and elite units' training, while scaling back on reserve forces' training.
Military sources said that the IDF will do everything possible not to disturb the training of commanding officers on all levels.
A military source warned that such cutback would carry a hefty price. As an example, he cited the military's plan to create "action units" – combat units able to carry out versatile operations in any of the IDF's sectors.
These units, he said, are equipped with some of the world's most advanced warfare technology, and any setback they suffer due to budget cuts is likely to compromise Israel's readiness vis-à-vis the threats brewing in the Middle East.
"For the IDF, 2012 is already a 'lost year.' The investments in the military from 2007 and on, which have increased its abilities and capabilities will all go to waste."
Meanwhile, IDF Deputy Chief of Staff Major-General Yair Naveh warned that the pending budget cuts will harm the military's satellite deployment and the acquisition of the Arrow and Magic Wand missile defense systems.
Speaking before the Knesset's Foreign Affairs and Defense Committee, Naveh said that "The IDF is conducting itself on a minute-to-minute basis. This situation, where the defense establishment has been informed that additional budgets were not approved has created an unbearable situation. We're still NIS 3 billion ($802 million) short."
Naveh said that the cuts have forces the military to suspend the purchase of two additional Iron Dome
batteries, as well as several acquisitions pertaining to the Arrow and Magic Wand systems.
Still, sources in the military industries said that so far, no existing contract has been canceled, adding that Rafael – which manufactures Iron Dome – is the only one that was notified of any change in the scope of business.
Many of the IDF's defense projects are funded using US aid funds. Defense sources said that any real change in the scope of business would probably be noted only in 2013.
The Defense Ministry said that the heads of the military industries were "personally briefed on the new budget constraints and their implications." A ministry source stressed that "impeding the Arrow project is out of the question."
The ministry added that all major defense projects have suffered only a minimal blow, meant to "get them through the first (fiscal) quarter."
Udi Etsion and Tzvika Brot contributed to this report
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