Israel Coalition Crisis Defused With Agreement on Budget
Israeli Ruling Partners Face Midnight Deadline to Save Coalition
(Bloomberg) -- Israel’s rickety coalition government narrowly averted a collapse on Monday after its lead partners agreed to paper over differences as a coronavirus outbreak rages and Prime Minister Benjamin Netanyahu’s graft trial swings into gear.
A fourth election since April 2019 would have been called if Netanyahu and Defense Minister Benny Gantz hadn’t agreed to extend the midnight Monday deadline for approving the national budget. Under Israeli law, parliament is automatically dissolved if a spending plan isn’t approved on time.
But a deadline can be pushed out, and hours before it was to expire, both leaders announced that their parties would vote in parliament by the end of the day to push back the cutoff date until December. “The last thing Israel needs right now is elections,” Netanyahu said, shortly before the amended deadline was approved by Knesset.
The defusing of the coalition crisis doesn’t mean it’s over for good, however, because it didn’t resolve disputes over spending or defuse other possible threats to the coalition’s stability.
Suspicion is rife that Netanyahu will call early elections at some point rather than turn over the reins to Gantz in November 2021 as stipulated in their power-sharing agreement. A new round of balloting would also give him an opportunity to try to win a more pliant coalition that would derail his corruption trial.
Another election would be crippling, with the country in the throes of a second virus wave far more serious than the first, and having barely emerged -- if at all -- from long months of policy paralysis.
“The public’s faith in its elected representatives will sink to a grave low if there’s another round of elections,” President Reuven Rivlin warned last week.
A new vote could have also backfired against both men politically, because polls show both Netanyahu’s Likud and Gantz’s Blue and White sinking if another election were to be held today. A bungled reopening of the economy after the coalition was installed in mid-May has sent virus infections soaring about 500% and deaths more than tripling.
The economy, meanwhile, contracted nearly 29% in the second quarter due to the health emergency, and unemployment is topping 20%. Israel has borrowed billions to relieve the pressure on its finances, leading the Bank of Israel to forecast the budget deficit will swell to 13% of output this year.
Popular discontent that’s been touched off by the virus has erupted in mass protests against Netanyahu.
Although his partnership with Gantz gave Israel its first permanent government since December 2018, it’s been limping from the start. Distrust bled through their coalition agreement, with each man demanding many protections. Action on the coronavirus has been compromised by a fractious government of 30 ministers.
Squabbling has extended to issues as granular as gay conversion therapy and as sweeping as annexing West Bank land the Palestinians want for a state. That last problem was sidelined, but only temporarily, when Netanyahu agreed to suspend his annexation plans in order to secure a peace framework with the United Arab Emirates -- negotiated behind Gantz’s back.
Questions about Netanyahu’s motives have played a major role in the budget crisis. Likud has argued that a more complicated, two-year spending proposal would prevent officials from moving urgently to remedy the virus-battered economy.
But the duration of the budget has political implications as well. The two-year plan, which Gantz champions, would deny Netanyahu the chance to bring down the government over next year’s spending plan -- and block the defense minister from taking over as premier.
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