Israel Nears Unprecedented Third Vote as Gantz Coalition Bid Fails
Israel Nears Unprecedented Third Vote as Gantz Coalition Bid Fails
(Bloomberg) -- Israel has three weeks to stave off an unprecedented third election after former military chief Benny Gantz failed to muster enough support in parliament to form a government and dislodge legally embattled Prime Minister Benjamin Netanyahu.
Political newcomer Gantz -- the only politician to present a serious challenge to the prime minister over the past decade -- informed Israeli President Reuven Rivlin late Wednesday that, like Netanyahu before him, he couldn’t cobble together a governing coalition.
Gantz, in a televised address, said he was “willing to make far-reaching concessions” to form a broad-based government uniting his Blue and White faction and Netanyahu’s Likud, but was confronted by “a bloc that insisted on putting the interests of one man before the interests of the country.”
Now, in a development that has never happened before in Israel’s 71-year history, the ball goes to parliament’s court.
If a majority of Israel’s 120 lawmakers can line up behind a member of parliament -- including Netanyahu or Gantz -- they can ask Rivlin to give that person 21 days to take a crack. Apart from the two main candidates, nobody has stepped up. If no government is formed, parliamentary automatically disbands and a revote will be called for early next year.
“Short of one or both of the leaders coming down a little bit further from their tree, or perhaps a game-changing decision from the attorney general,” who will soon decide whether to indict Netanyahu on corruption charges, “we’re going to third elections,” said political strategist Ashley Perry, a former adviser to ex-defense minister and political kingmaker Avigdor Liberman.
Political Paralysis
Israeli government bond yields rose on Wednesday when it became clear that Gantz would have to tell Rivlin he couldn’t get the job done. The shekel remain little changed and one-year interest rate swaps were unchanged -- a sign that investors don’t expect the political stalemate to impact borrowing costs.
While Netanyahu and Gantz stare each other down, the country has been run by caretaker governments with limited ability to fix urgent problems like the budget deficit, an antiquated transportation system and overcrowded hospitals -- let alone the country’s intractable conflict with the Palestinians.
“It could really hurt the economy,” said Alex Zabezhinsky, chief economist for Meitav Dash Investments Ltd. “If you don’t have a government for a long period of time, like about a year, you feel substantially the impact of this on investment, infrastructure, in many industries.”
The stalemate has already frustrated the Trump administration’s efforts to introduce its long-delayed play for Middle East peace.
Netanyahu dismissed Gantz’s allegation that he was to blame for the impasse and called on him on Thursday to renew negotiations. “We can overcome our differences,” he said.
Polls suggest a third round of balloting would produce another deadlock. But the cards could be shuffled if Attorney General Avihai Mandelblit decides before the election to charge Netanyahu with bribery and fraud, as he’s signaled he intends to do. An indictment would ratchet up calls for the prime minister’s immediate resignation and could weaken him and his Likud party ahead of the vote.
Israel’s Yediot Ahronot newspaper reported that an indictment could come down as early as Thursday.
Although Netanyahu denies wrongdoing, he’s angling to change Israeli law to grant sitting prime ministers immunity from prosecution. For this reason, he’s been less willing to compromise than Gantz, analysts say.
Options Closed
Gantz, who promised a respite from the divisiveness and corruption scandals that tarnished Netanyahu’s tenure, started the day with a midnight deadline and two problematic routes to a coalition government that would send the prime minister packing. By midday, both seemed closed.
Talks with Netanyahu on Tuesday night on teaming up their parties in government broke down, in part due to disputes over allowing Netanyahu to remain in office if indicted. His other alternative -- forming a minority government -- was shot down by Liberman, whose party he would have needed to get there.
“There’s no option other than a unity government,” Liberman said.
To contact the reporter on this story: Yaacov Benmeleh in Tel Aviv at ybenmeleh@bloomberg.net
To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Amy Teibel, Michael Gunn
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