So much attention is understandably concentrated on the existential threat a nuclear-armed Iran poses to Israel that there is a tendency to overlook the fact that the previous Israeli government collapsed over a crisis concerning the 2015 budgetin other words, how will Israeli society allocate its resources between defense and security on the one hand and social and infrastructural spending on the other.
Rather than a grab for ministerial seats, we believe that the present political conundrum is the super-difficult choice between defending the country and having a country worth defending, and that this is the major difficulty in forming a new government following March’s election. It appears Kulanu is demanding an increase in social spending without further decreasing defense spending. This seemingly insolvable problem can be addressed by decreasing or eliminating spending on West Bank settlements, variously estimated as between two billion shekels (the official amount) and twenty billion shekels (when all other expenditures benefitting the settlements are included--5-7% of the Israeli budget--the exact amount spent is a well-guarded secret, buried in the labyrinth of line items of different ministries.)
If settlement funding were to be reduced by, say, ten billion shekels and social spending increased by that amount, that might satisfy Kulanu but the howls from Bayit Hayehudi would ring out from Metula to the Negev. It is our belief that it is this conundrum that underlies the difficulty Netanyahu is having in forming a new government.
If we are right, and if the circle can’t be squared, what are the alternatives? There are theoretically three: a Labor-led center-left government, new elections, or a grand coalition between Likud and Labor. In reality, Herzog can’t form a governmentthe arithmetic simply doesn’t work; the Haredi parties will not sit with Yesh Atid, and all three parties would be required. No one wants another election -- which would probably solve nothing anyway. So what about the grand coalition, the solution obviously favored by President Rivlin and floated in the press?
This last possibility has been rejected by Herzog. Curiously, however, instead of simply saying that he doesn’t want to be part of a coalition with Likud, he states that “…he is happy with being leader of the opposition.” Strange wording.
It's intriguing to note that, if a grand coalition is formed, the United Arab List will become the official opposition. Under current law, their leader would be entitled to receive monthly briefings on all plans and programs formulated by the government. Given the fact that under those conditions any such information would probably immediately become available to the Palestinian Authority and perhaps also to Hamas, such a situation would be intolerable. If sensitive information were withheld the opposition leader would protest and probably bring legal action against the government. Even though no Israeli court is likely to order the government to provide such information, the international publicity would be highly negative.
At any rate, the situation on the ground remains the samehow to increase social spending while not reducing defense spending further. We expect that Kahlon and Bennett will simply have to agree on some compromise--shifting some funding from the settlements to social and infrastructural uses and perhaps even allocating more to defense because of the current Iran crisis.
Such a compromise, being a coerced solution, is imperative but risky, and likely will lead to an unstable, rickety coalition that will probably last less than a year, crumbling before the approval of the next budget. After that, new elections would have to be held. Before anyone holds up their hands in horror, this may not be such a bad result. It almost certainly will lead to new leadership in Likud, and a more stable coalition government the next time around, perhaps even the proposed grand coalition
Published by Globes [online], Israel business news - www.globes-online.com - on April 30, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015