April 4, 2016 - Netanyahu’s coalition at work: gas, profits and strategy; Dayan/Danon; Oren’s two-state solution


Yossi Alpher is an independent security analyst. He is the former director of the Jaffee Center for Strategic Studies at Tel Aviv University, a former senior official with the Mossad, and a former IDF intelligence officer. Views and positions expressed here are those of the writer, and do not necessarily represent APN's views and policy positions.

This week, Alpher discusses Israel’s High Court of Justice's mandated revisions in the Netanyahu government’s deal with the gas multinationals; why the appointment of Dani Dayan, former head of the Council of Settlers in Judea and Samaria, to the post of consul-general in New York last week generated so much controversy and what political ramifications such an appointment may have for Israel-US relations; and what former Israeli ambassador to Washington Michael Oren is doing in Netanyahu’s coalition.


Q. What is the significance of Israel’s High Court of Justice ruling regarding the government’s gas deal?

A. On Sunday March 27, Israel’s High Court of Justice mandated revisions in the Netanyahu government’s deal with the gas multinationals regarding exploitation of the huge Leviathan maritime field, located in the Mediterranean between Israel and Cyprus. The Court embraced the argument of a variety of public advocacy groups that the government had exceeded its constitutional rights in granting the multinationals immunity from changes in their royalty and incentive privileges for ten years (the “stability clause” in the agreements). The Netanyahu government, the Court stated, could not bind the freedom of decision of future governments that might have cause to amend the gas exploitation and production agreements.

The public advocacy groups, backed by persistent mass demonstrations against the “gas tycoons” and their ties to government, won at least a partial victory. Partial, because the Netanyahu government will now look for ways to bypass the ruling, albeit not through legislation: the government does not have an automatic majority in the Knesset for its position. As for the High Court, it once again drew fire from conservative quarters for “interfering” in government decisions and for lack of consistency: Israeli governments are not challenged when they regularly grant licenses to enterprises like cable television that extend far into the future.

There are many additional and sometimes exotic aspects to the Mediterranean gas drama. Take the key government regulator who resigned early in the game rather than yield to pressure from Netanyahu to allow concessions to the gas monopolies. Or the ministers and MKs who recused themselves due to ties with this or that tycoon. Then there are the current rock-bottom energy prices that threaten to render the entire enterprise non-profitable, along with a host of interested parties who have great difficulty understanding the fine points of the government’s extremely complex dealings with the gas companies, both Israeli (Tshuva) and American (Noble Energy). Finally Tshuva, Noble and others are threatening to avoid future gas dealings with Israel due to the never-ending legal complications.

There are also two issue areas of strategic importance that served as the focus of PM Netanyahu’s rare testimony before the High Court. One is the sovereign fund into which the government’s gas profits will flow and whose creation is repeatedly postponed by the inability of the “system” to get moving on Leviathan. Israeli health, education, welfare and related institutions stand to benefit. Meanwhile their budgets are continually cut by a government whose ruling philosophy is incentives to business and privatization of what is left of Israel’s welfare state.

The other strategic issue refers to Netanyahu’s plans to use gas sales as a means of improving and cementing Israel’s relations with a host of nearby Mediterranean countries--Egypt, Turkey, Greece and Cyprus--along with immediate neighbors Jordan and the Palestinian Authority. Russia, too, enters the picture as a potential co-developer of additional gas fields. To be sure, even in a best case situation regarding the development of Leviathan, which has a huge potential but will take a couple of years before going on stream, Netanyahu will be hard pressed to use the gas as leverage regarding all the neighbors. Turkey is at odds with Greece, Cyprus and Egypt, and its relations with Israel are still bad. Gas for Jordan and the PA is more a matter of buying peaceful coexistence than of profits. Egypt, where the courts (unlike in Israel) tend to toe the regime’s line and not make trouble, is developing its own gas fields.

Netanyahu’s argument that he needs the gas in real time to improve Israel’s regional strategic situation is a legitimate one. The High Court was not convinced. The entire complex of gas, monopolies, strategic ties, sovereign fund, the High Court’s jurisdiction and effective popular protest is again on hold.


Q. Last week Netanyahu appointed Dani Dayan, former head of the Council of Settlers in Judea and Samaria, to the post of consul-general in New York. Why did the appointment generate so much controversy? What political ramifications can such an appointment have for Israel-US relations?

A. Dayan’s appointment is ostensibly a consolation prize. Netanyahu originally appointed him ambassador to Brazil, but the government in Brasilia yielded to lobbying from anti-settlement circles, including BDS activists but also peace camp-related former Israeli diplomats who oppose Netanyahu government policies, and refused to accredit Dayan. Consular appointments, on the other hand, do not require approval on the part of the host foreign ministry--in this case the State Department.

Theoretically, a consul-general deals with consular rather than political issues, meaning that Dayan’s new appointment ostensibly reflects a setback for Netanyahu’s efforts to oblige the international community to acquiesce in the settlement enterprise. But for Jerusalem, the post of consul-general in New York is a special case. Israel’s consul-general in New York is its ambassador to a key strategic ally, the leadership of the American Jewish community.

Netanyahu reads the polls and understands that most of that community remains liberal, votes Democratic, is very concerned about the direction Israel is taking, and continues to exercise important influence over American politics. Netanyahu knows that the next American president, whether Trump or Clinton, is likely to be either not interested in Israel or suspicious of his policies. And he knows that even the vaunted strategic relationships he has cultivated with Moscow, Beijing and New Delhi cannot replace those with Washington. There are reasons why Netanyahu continues to hold onto the foreign minister post more a year after forming his current government. It is he who appoints Dayan. And Dayan as consul-general in New York can advance the government’s settlement project far more than Dayan as ambassador to Brazil.

Dayan is secular, affable, fluent in English, and a high-tech millionaire. He has published op-eds in the New York Times advocating Israel’s patronage of the settlements and the economic advantages for the Palestinians of coming to terms with the occupation. He is yet another supporter of “economic peace”--a patronizing approach that assumes the Palestinians can be bought off and that they will somehow behave themselves and acquiesce in their non-sovereign status when they have full stomachs. Dayan, like Netanyahu, believes that with the right “hasbara” (public diplomacy) it is possible to sell the settlements to the international community and particularly the American public. And never mind that this policy is turning Israel into a bi-national entity and distancing it from its Zionist, Jewish and democratic roots.

Expect Dayan to turn on the charm: not only with liberal Jews and the New York-based national Jewish leadership but, as a native Spanish speaker, with New York’s large and influential Hispanic community as well. True, he got off to a bad start in late March by labeling J Street “anti-Israel” and “un-Jewish”. But he later apologized for being “somewhat undiplomatic” and pledged to engage in “inclusive dialogue with all parts of the Jewish community”. He’s a quick learner and usually a smooth talker.

A few years ago, I wrote something that confused an extremist quote from Dani Danon, now Netanyahu’s UN ambassador, with Dani Dayan, who admonished me and insisted that Danon was “far more extreme” than him. I printed an apology for the misattributed quote. Now that New York is hosting both Danon and Dayan, New Yorkers can judge for themselves.


Q. Former Israeli ambassador to Washington Michael Oren, now a centrist MK in Netanyahu’s coalition, continues to promote a proposal first aired a year ago for a “two state situation” that would facilitate Israeli hasbara. What is he doing in Netanyahu’s coalition?

A. Indeed, Oren is the only member of the coalition, and of his own party, Kulanu, who seeks to promote even minimalist two-state thinking: a settlement-construction freeze beyond the settlement blocs alongside (“economic peace” yet again) measures to strengthen the Palestinian economy such as more Israeli work permits for Palestinian day laborers. Such a plan, he argues, “would take the air out of the BDS balloon. . . . the Europeans would be supportive. . . . Even if the two-state idea is not currently applicable and practical, it’s possible to prepare the groundwork. . . . We are still committed to the two-state solution and must return to the negotiating table even if the chair opposite us is empty. . . . I think my plan is the maximum we can do to generate the minimum that Europe is prepared to accept.” Oren terms this a two-state situation rather than a two-state solution.

Oren has no illusions that his ideas will somehow buy off the Palestinian leadership and generate, hocus-pocus, a viable Palestinian partner willing to sit down with Netanyahu. But he does appear to believe that creating a veneer of Israeli good will could satisfy European demands and persuade Brussels to back off from sanctions pressures against the settlements. Whether or not he’s right is almost immaterial: the other 60 MKs in Netanyahu’s coalition won’t buy Oren’s settlement freeze. Can we imagine Dani Dayan agreeing to be consul-general in New York if he, the former head of the settlement movement, would be obliged to support a settlement freeze?

So why did Oren agree to join this coalition? I can only answer this question with another: why did he happily represent Netanyahu’s policies as ambassador in Washington for five years? The bottom line is that any and all talk of a genuine two-state solution or settlement freeze on the part of anyone in this coalition is, for lack of a better term, bullshit. Dayan, Danon, Oren and all the rest of them are part and parcel of the slippery slope we are sliding down toward the end of Israel as a democratic and Zionist state.

P.S. On Sunday the permissible fishing periphery for Gazan fishermen was expanded by Israel from six to nine nautical miles. Such liberalized economic measures undoubtedly promote individual Palestinian well-being, and that’s a good thing. But they don’t promote peace: both intifadas broke out (in 1987 and 2000) at times of relative Palestinian prosperity, as did even the 1936 Palestinian revolt against the British mandate. Once again, this conflict is not economic, but rather political, ideological and increasingly religious. Palestinian economic well-being does nothing to slow our slide down the slippery slope.