Israel's President Taps Netanyahu to Form Next Government

(Bloomberg) -- Israel’s president asked Benjamin Netanyahu to form the next government Wednesday, a week after the incumbent prime minister saw off a strong centrist challenge in national elections.

After consulting with all parties that made it into parliament, Reuven Rivlin concluded only Netanyahu’s Likud could form a coalition supported by a majority of the 120-member Knesset. Netanyahu now has six weeks to haggle with potential partners over ministries and principles for a government that’s likely to be one of the most conservative in the country’s recent history.

“The precedent in Israel is that he will have to exploit the full 42 days, because everybody is playing at being a tough negotiator,” Hebrew University political scientist Avraham Diskin said. “What will be decided after 42 days could already be decided on tomorrow morning. But Israeli politicians play the game until the very end.”

The center-right Likud won 35 seats in the next Knesset, the same as Benny Gantz’s center-left Blue & White bloc. Netanyahu, though, can draw on the support of smaller right-wing and religious parties to form a coalition with 65 seats.

Though it’s Netanyahu’s fifth term as prime minister, he told Rivlin Wednesday night he was “as excited as the first time -- in a certain way, maybe even more.”

Key Issues

Two issues are likely to emerge as critical in the negotiations: the looming U.S. peace plan and Netanyahu’s legal troubles. The peace plan’s main author, Jared Kushner, said Wednesday the plan will be released sometime after the Muslim holy month of Ramadan concludes in early June.

Speculation is rife over whether the plan will include a Palestinian state or allow Israel to annex West Bank land the Palestinians also claim. Netanyahu said in the closing days of the campaign that if re-elected he would extend Israeli sovereignty to West Bank Jewish settlements, but it’s not clear if he was serious or just fishing for right-wing support amid a tight race.

Netanyahu also may probe whether potential coalition partners are willing to shield him from prosecution as long as he’s in office. Israel’s attorney general has said he’ll likely charge the prime minister with bribery and fraud in several corruption cases, though Netanyahu first can present his side of the story in a hearing that can last months. He isn’t obligated to resign unless he’s convicted and has exhausted all appeals.

Mitchell Barak, a pollster and political consultant who worked for Netanyahu in the 1990s, said Netanyahu is in a stronger position in the coalition negotiations than after past elections. With Likud so much larger than its likely partners -- the next-largest party has just eight seats -- the prime minister is less vulnerable to pressure than usual, Barak reasons.

Bargaining Power

Likewise, the fact that Likud and Blue & White together would have enough seats to form a unity government -- even though Gantz has said he won’t sit with Netanyahu -- boosts the premier’s bargaining power.

“It’s a quiet threat to Netanyahu’s right-of-center coalition partners,” Barak said. “They can’t break the bank this time because there’s a viable alternative.”

One wild card is Avigdor Liberman, whose resignation as defense minister in November precipitated the last government’s collapse. Netanyahu needs Liberman’s five-seat Yisrael Beiteinu party to form a right-wing coalition, yet Liberman’s insistence on drafting ultra-Orthodox men into the army could damage Netanyahu’s ties with religious parties.

“There’s no coalition without Liberman,” said Ofer Kenig, a research fellow at the Israel Democracy Institute think-tank. “Netanyahu will give him whatever he demands as long as he finds a formula that will resolve the conflict between Liberman and the ultra-Orthodox parties.”

If Liberman plays coy, Netanyahu may try to peel off individual members of Blue & White who share his ideological outlook and could be swayed with promises of a cabinet post.

“Let’s not forget that Blue & White is a list of candidates created at the last possible moment,” Hebrew University’s Diskin said. “It’s not a Catholic wedding.”

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