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Early ballot will not shake Israel's economy -finance minister

* Government will carry 2012 budget until new one passed

* Steinitz expects 2013 budget by March or April

By Maayan Lubell

JERUSALEM, Oct 10 (Reuters) - Finance Minister YuvalSteinitz said on Wednesday Israel's financial stability will bemaintained in 2013, despite an early election called after thegovernment was unable to agree on a budget.

"In July ... half the budget, the revenue side of it, wasalready passed, in order to make sure ahead of time that if the(full) budget is not passed, that revenue, deficit and financialstability will be preserved in 2013," Steinitz told Army Radio.

Prime Minister Benjamin Netanyahu announced on Tuesday hewill seek an early election after he was unable to agree withhis coalition partners over proposed cuts in the 2013 budget.

Parliament will dissolve itself in the coming days and fixthe election date, with Netanyahu in charge of a transitionalgovernment until a new administration is sworn in. The vote islikely to be held in January.

Steinitz said that in the first few months of 2013, thegovernment will continue working with the 2012 budget, taking a12th of it monthly until a new budget is passed.

"The election will probably be held in January. I presumethat in February, Benjamin Netanyahu will have formed his newgovernment and by March or April there will already be a newbudget," Steinitz said.

Netanyahu has been under pressure from Israel's central bankto maintain fiscal credibility at a time when the economy isslowing and tax revenues are falling short.

Israel's cabinet approved a package of tax hikes andspending cuts in July, measures the Finance Ministry had saidwould add 14.4 billion shekels to state coffers next year.

In an interview with Reuters last month, Steinitz said the2013 budget calls for 10 billion to 14 billion shekels' worth ofcuts in order to reach a 3 percent of GDP deficit target.

Israel's economy weathered the global economic crisis welluntil a year ago, when exports began to slow as a result ofdownturns in Europe and the United States, its two largesttrading partners.

Exports account for about 40 percent of Israel's economicactivity. The central bank forecast in September the economywould grow 3 percent in 2013, down from an estimate made in Juneof 3.4 percent.

($1 = IS 3.862)

(Writing by Maayan Lubell; editing by Ron Askew)

((maayan.lubell@thomsonreuters.com)(+972 2 632 2202)(ReutersMessaging: maayan.lubell.thomsonreuters.com@thomsonreuters.net))

Keywords: ISRAEL BUDGET/