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“A Fateful Time Ahead for Netanyahus Divided Government”
by The Times of Israel   
August 29th, 2014
Prime Minister Benjamin Netanyahu speaks during the weekly cabinet meeting, on June 15, 2014. (photo credit: AFP/Pool/Abir Sultan)
Prime Minister Benjamin Netanyahu speaks during the weekly cabinet meeting, on June 15, 2014. (photo credit: AFP/Pool/Abir Sultan)

Will Prime Minister Benjamin Netanyahu’s coalition survive the blowback from what many Israelis see as an ambiguous and unsatisfactory outcome to the Gaza war?

The devil, as always, is in the details.

There are two political dangers ahead for Netanyahu’s government: the immediate fallout from dissatisfaction over the end of the Gaza fighting, and the looming crisis of the budget debate set to begin in mid-September.

Those who may be considering leaving the coalition and forcing new elections — Foreign Minister Avigdor Liberman chief among them — are carefully watching the postwar mood this week for signs that Netanyahu is weakening. In 2006, the immediate public backlash against then-premier Ehud Olmert, in the wake of the Second Lebanon War’s ambiguous conclusion, sent him into a downward spiral from which he never recovered.

Netanyahu’s opponents on the right, who in recent days have ridden a wave of public dissatisfaction with his conduct of the war, will watch for a similar plunge in Netanyahu’s case — in polls, in media criticism, in the public mood writ large. They are unlikely to topple their own coalition as long as Netanyahu does not appear mortally threatened.

First indications in postwar polls do not favor the erstwhile revolutionaries.

A Channel 2 ShiluvMillwardBrown poll on Thursday suggested the public was unhappy with the outcome of the conflict, but not with Netanyahu’s leadership of the country. By 54 percent to 37%, Israelis opposed the ceasefire reached Tuesday, and 59% don’t believe Israel defeated Hamas (just 29% believe it did). Israelis also pin the blame for this failure on the political echelon — 83% say the IDF did its part well.

But for all that, Netanyahu’s personal favorability rating remains at 32% — not high, but not the Olmert postwar plunge into the single digits either. In favorability terms, it is worth noting, Netanyahu has polled in the 30s and 40s for much of the last five years. In Israel’s parliamentary politics, one doesn’t have to win a majority of the vote to be prime minister, just the support of a majority of the post-election Knesset. High favorability among one-third of the electorate is enough to win elections.

Foreign Minister Avigdor Liberman with Prime Minister Benjamin Netanyahu in the Knesset as it votes on the Governance Bill, March 11, 2014. (photo credit: Miriam Alster/FLASH90)

Foreign Minister Avigdor Liberman (right) with Prime Minister Benjamin Netanyahu in the Knesset as it votes on the Governance Bill, on March 11, 2014. (photo credit: Miriam Alster/Flash90)

A Haaretz-Dialog poll conducted Wednesday showed similar frustration with the war (54% said neither side had won), but even stronger support for Netanyahu. Most critically for Netanyahu’s would-be challengers, both polls found Netanyahu continuing to lead by a wide margin on the question of suitability as prime minister.

Asked which of Israel’s top party leaders was most suited to being premier, 42% said Netanyahu, just 12% said opposition leader Isaac Herzog, and 11% each for Liberman and Minister of Economics and Trade Naftali Bennett. And cementing Netanyahu’s lead: The second most popular choice, at 20%, was “don’t know.” The Channel 2 poll on the same question placed Netanyahu at 28% and second-place Bennett at 15%.

Finally, Bennett, the right-wing critic with the most to gain in an election — wartime polls placed his 12-Knesset-seat party at 17 or 18 seats — is also the one most dependent on a Netanyahu premiership for his own seat at the cabinet table. Bennett knows he is extremely unlikely to win election as prime minister himself, and cannot sit in a left-leaning government that will be eager to pursue the establishment of a Palestinian state.

There is still time for the negative trend in the polls to do decisive damage to Netanyahu’s political standing and topple his government. But barring a major downturn from what the immediate postwar polls have shown, popular frustration at the war’s conclusion, as it stands now, is unlikely to unseat him.

Jewish Home leader Naftali Bennett  seen with leader of the Yesh Atid party Yair Lapid, after the Draft law was passed in the Israeli parliament, with a unanimous vote, March 12, 2014. (photo credit: Flash 90)

Jewish Home leader Naftali Bennett (right) seen with leader of the Yesh Atid party Yair Lapid, after the Draft law was passed in the Israeli parliament, with a unanimous vote, March 12, 2014. (photo credit: Flash 90)

Netanyahu’s second major political threat comes in mid-September, when Finance Minister Yair Lapid is slated to present the 2015 national budget to the government for a vote. If it passes in the cabinet, it is likely to pass easily in the Knesset, but the cabinet fight looks set to be a bruising one.

The budget battle begins with the expected growth of the defense budget. In the wake of the Gaza war, the Defense Ministry has asked for a 20-billion-shekel increase to the NIS 52-billion budget of 2015. An increase under 10 billion, it has said, would leave Israel’s defenses dangerously underprepared for the many dangers that loom on the country’s borders and beyond.

To pay for such an increase, Lapid decided in recent days to increase the government’s deficit spending target — to avoid the specter of tax increases or benefit cuts to the middle-class voters upon which his political future depends. Lapid remembers acutely the spending cuts of last year’s budgets, which cost him as many as half his voting base in polls, drops from which he has yet to fully recover.

The deficit decision led to a bitter public spat between him and Bank of Israel governor Karnit Flug. The Bank is warning that increased deficits could have painful repercussions for the economy as a whole at a time of weakening performance. Just last week, the Central Bureau of Statistics published performance figures for the second quarter of 2014 that showed just 1.7% growth, down from 2.8% in the previous quarter and 5.3% in the same quarter last year. Those figures are from before the start of the fighting and the resulting increase in defense outlays and the bludgeoning of Israel’s tourism industry.

Indeed, Lapid’s deficit decision came in a week that saw the central bank lower interest rates for September to a historic low of 0.25% as a stimulating measure for the softening economy.

The defense budget increase is all but assured — though probably only to the army’s minimum request of 10 billion shekels. Netanyahu recognizes the defense establishment’s increased needs after the Gaza war, say observers. Meanwhile, the country’s top economic planners are railing against a deficit increase. And the finance minister believes increasing tax revenue or decreasing benefit spending will be destructive to him politically.

It is a standoff that bodes ill for the cabinet debate next month.

Lapid has no easy way out of the problem. He is not likely to leave the government in the coming days to escape publishing a budget under his name. The budget is due to be presented in two weeks. It is largely completed, and resigning now won’t spare him the political fallout from being tied to whatever ends up on the cabinet table.

He may, instead, try to do what politicians in Israel sometimes call “dancing at two weddings at once,” or in America, “have his cake and eat it too.” This would mean presenting a politically palatable (and arguably fiscally irresponsible) budget to the government, one that increases deficit spending instead of raising taxes or cutting benefits — and then letting the cabinet vote in the necessary changes.

Lapid would then be able to tell his voting public that the larger cabinet, or simply Netanyahu, was responsible for the painful measures in the 2015 budget, not his own budget.

While Netanyahu would not be elated at such a move, he may be relieved. For Lapid, the alternatives to scapegoating Netanyahu include taking his likely irreplaceable 19 seats out of the coalition.

If the polls remain unflattering but steady, and cabinet ministers don’t let the budget showmanship get the better of them, Netanyahu’s government will last until the start of the winter Knesset session in October.

Then, with the return of Israel’s politicians to full-time wrangling, the country’s politics will snap back to their usual, dependable, permanent state of low-level crisis.

Oh, and then there are the American mid-term Congressional elections — the last time President Barack Obama has to be polite to anyone. Come November, with a US president in desperate need of a legacy and no voters to cater to ever again, it is not inconceivable that Israel will find itself in a new round of Washington-imposed peace talks, with all the attendant uncertainties for the government’s domestic standing and political unity.

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