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Turbulent road ahead for Netanyahu coalition

Centre-right government set to be formed in Israel seems wired for dysfunction, analysts say.
Last Modified: 15 Mar 2013 09:29
Netanyahu won a third term as prime minister in the January elections [Reuters]

Jerusalem - Things were not supposed to work out this way for Binyamin Netanyahu.

The Israeli prime minister called for early elections in September amid growing discontent on a range of issues. He hoped to splinter an Israeli left which was recently showing signs of life, and to head off a challenge from his right flank, both from other parties and from within his own Likud.

But the next few months were a litany of bad decisions, analysts and politicians here say.

Netanyahu's alliance with the ultra-nationalist Yisrael Beiteinu, a party that largely caters to immigrants from the former Soviet Union, alienated many voters from within Likud.

And the prime minister underestimated the popularity of both Yair Lapid, a former television journalist who launched a new centrist party, and Naftali Bennett, a onetime aide to Netanyahu who now leads the right-wing Habayit Hayehudi.

The combined Likud-Beiteinu list underperformed in January’s elections, and it took nearly six weeks of negotiations for the weakened prime minister to cobble together a coalition. A deal was to be signed on Friday, after a last-minute disagreement between Netanyahu and Bennett was resolved.

If his new government is sworn in as expected on Monday, it will be without Shas and United Torah Judaism, two parties representing ultra-Orthodox Jews that have been mainstays of Netanyahu’s coalition. They provided reliable right-wing votes in exchange for economic subsidies and exemptions from army service for their voters.

In their place are Bennett and Lapid, both of whom have demanded an end to the special treatment afforded to the ultra-Orthodox, known in Hebrew as haredim.

"It will be less than was said during the elections," said Yair Sheleg, an expert on the ultra-Orthodox at the non-partisan Israel Democracy Institute.

"But there will be an expectation of the draft, and there are two main units they will be drafted into, even though it will be less than people hoped."

Economic challenges

Beyond that, though, analysts say the new government seems wired for dysfunction.

"The man crowned King Bibi by Time magazine just nine months ago will now have to consult with Prince Yair on the left and Duke Naftali on the right when making key decisions," wrote Gil Hoffman, the Jerusalem Post’s political reporter, referring to Netanyahu by his nickname.

"Everyone says that big chunks [of budget cuts] will come from security, but that’s always problematic in Israel. Yet it’s hard to think they will be able to cut 15bn otherwise.”"

- Rafi Melnick, former Bank of Israel official

The elections were decided largely on socioeconomic issues: voters angry about the rising cost of living demanded lower prices and more government spending on health care, education and other services. The electorate who supported Lapid’s Yesh Atid party were the same ones who took part in widespread socioeconomic protests in 2011.

But the new government faces a yawning deficit. Stanley Fischer, the governor of the Bank of Israel, has said it will need to slash $4bn, and possibly raise taxes as well, in order to close a deficit which reached 4.2 percent of GDP last year, more than double the government target.

Slashing benefits for the haredim could save between $135m and $270m, depending on how deep the cuts go. That still leaves five percent of the Israeli budget to trim.

"That’s not an easy thing to do with a new coalition," said Rafi Melnick, a former official at the Bank of Israel.

"Everyone says that big chunks will come from security, but that’s always problematic in Israel. Yet it's hard to think they will be able to cut 15bn shekels ($4bn) otherwise."

Senior members of Likud said last month that they would cut $800m from the defence budget, but the army has pushed back, arguing that regional instability makes it irresponsible to shrink the army. Beyond that, incoming members of the Knesset have said little about what they would slash.

None of this means much for the Palestinian citizens of Israel, who make up some 20 percent of the population.

Around 50 percent of them live below the poverty line, and several legislators who represent this community dismissed the talk of economic reforms as focused entirely on the Jewish population. "I don’t think anything will change," said Jamal Zahalka, the head of the Balad party.

Knesset threshold

Legislators like Zahalka might struggle simply to hold onto their jobs, because the coalition agreement reportedly includes a plan to raise the threshold for parties to enter the Knesset.

A party currently needs to win two percent of the popular vote in order to receive any seats, Lapid wants to double that to four percent. That would exclude all three parties representing Palestinian citizens of Israel, none of which received more than four percent in the last election.

"If you look, most of the Israeli ministers are against even the miserable proposal from Netanyahu for two states. Most of the Knesset members are against that. There is no Israeli partner for negotiations."

- Jamal Zahalka, head of Balad party

Zahalka said the higher threshold would force his party to unite with its competitors - though Palestinian legislators have called for unity before, and it has proved elusive.

"That has been on the table since 2003. But they didn't do it because of the presence of the haredi [parties]," some of which would just barely clear a higher threshold, Zahalka said. "Now they're out … so we have no choice but to unite."

The new government will bring far fewer changes when it comes to talks with the Palestinian Authority - because there is little appetite for those talks.

Tzipi Livni, the first politician to join Netanyahu's new coalition, will receive a new position as chief negotiator with the Palestinians. Livni herself has taken some right-wing positions, like supporting a plan to expel Palestinian citizens of Israel into a future Palestinian state.

She is nonetheless a relative moderate on this issue - but she will be negotiating on behalf of a right-wing government which includes a coterie of settlers and their allies in key positions.

In a radio interview on Thursday, one Israeli commentator, Chico Menashe, described Livni as the "chief launderer" of Netanyahu’s policies.

The defence ministry controls the construction of illegal settlements in the occupied West Bank - and its likely leader, Moshe Yaalon, is an outspoken advocate of settlement growth. His probable deputy, Ze'ev Elkin, is a settler himself.

'Political joke'

The foreign ministry will again be led by Yisrael Beiteinu leader Avigdor Lieberman, a settler and a hardliner on the Palestinian issue (that is, unless he is convicted in an ongoing corruption trial).

"I call it a political joke," Zahalka said of Livni's appointment. "If you look, most of the Israeli ministers are against even the miserable proposal from Netanyahu for two states.

"Most of the Knesset members are against that. There is no Israeli partner for negotiations."

Perhaps the biggest question is how long Netanyahu's new government will last. His goal, in calling early elections, was to build a stable right-wing/ultra-Orthodox coalition which could survive a full five-year term.

Instead he got an odd centre-right coalition - and a vocal opposition. Shelly Yachimovich, the head of the Labor party and probable opposition leader, has visions of restoring her party to primacy and becoming prime minister someday.

And the ultra-Orthodox parties are angry. Aryeh Deri, the head of Shas, warned that Netanyahu's coalition would not last "We will meet in elections," he wrote on Facebook. "It is not much longer."

Eli Yishai, a member of Knesset from Shas, threatened earlier this month to organise a boycott of products produced in Israeli settlements - raising the bizarre possibility of the hardline former interior minister finding common cause with, say, Palestinian Prime Minister Salam Fayyad.

He recently seems to have backed down from that threat, but clearly tempers run high.

There is talk that Netanyahu will eventually try to force Lapid out of his coalition and replace him with the ultra-Orthodox parties, which would test the alliance Bennett and Lapid forged during the coalition talks.

"They're much more pragmatic now than they were before," Sheleg said of the ultra-Orthodox parties. "Netanyahu prefers the ultra-Orthodox more than Lapid and Bennett, so it's a realistic script."

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