Hard Questions, Tough Answers: The broad significance of Israel’s first budget in three years (November 8, 2021)


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.

Q: By broad significance, you mean a stable government, long-awaited economic reforms, better governance, changes in the political landscape?

A: All of the above, and more. When a fragile, extremely diverse, anti-Netanyahu coalition succeeds in finally passing a budget as it did last week, it potentially affects everything.


Q: Let’s start at the end of the list. What has changed in Israel’s political landscape?

A: Here there are two sorts of changes: in Israeli politics in general, and in the political fortunes of specific politicians.

At the broadest level, with passage of a budget for 2022, the stability of the Naftali Bennet government is virtually guaranteed. This, despite the fact that it rules by virtue of a one-mandate majority in the 120-member Knesset. So, too, is the August 2023 premiership rotation between Bennet and Yair Lapid now a virtual certainty. (Lapid, incidentally, becomes caretaker prime minister even in the unlikely case that Bennet loses a vote of no-confidence before August 2023.)

By the same token Benjamin Netanyahu, having failed to thwart the budget, can now look forward to a prolonged stint as head of the parliamentary opposition. Unless he chooses to step aside or is deposed by his increasingly disgruntled Likud Knesset faction. All this, in accordance with prevailing parliamentary and constitutional provisions and rules that are too esoteric to warrant explaining here in detail.

Then too, the dramatic budget victory appears to cement an unusual new reality in Israeli politics. Not only is the 59 MK-strong parliamentary opposition--Likud, Religious Zionism, two ultra-Orthodox Haredi parties--totally right wing, with the exception of the six-MK Arab Joint List. So, to a large extent, is the coalition, where rightist parties led by the likes of Bennet, Saar and Liberman dominate and Lapid and Gantz are right-leaning centrists.

As Housing Minister Zeev Elkin of Saar’s New Hope party bragged after the budget victory, “It has again been proven that Netanyahu and the Likud can be defeated not by the left but by the right.” Even Mahmoud Abbas and his Raam party, who are Arab Islamists, can be considered, at least in Arab terminology, right-wing. This leaves the left--the coalition’s Labor and Meretz parties (together, 13 MKs) and the opposition’s Joint List--with a total of 19 MKs. And this painfully small leftist minority is split between the coalition and the opposition.

At the more specific, personal level, the budget victory signals the rise to greater prominence in national politics of four figures. Bennet, despite representing a tiny Knesset faction, is now an international figure familiar in the halls of power in Glasgow and Sochi, and who has registered a solid achievement against the covid-19 pandemic. Lapid is now virtually certain to succeed him and can be credited with having engineered the creation of this bizarre but successful and well managed coalition (in which Lapid’s Yes Atid party, with 17 MKs, remains far and away the largest faction).

Avigdor Liberman has succeeded far beyond expectations as minister of finance. Beyond expectations, because he did not shine prior to now in brief stints under Netanyahu at major ministries--foreign affairs and defense. But he excelled at preparing the budget and guiding it to Knesset approval under extremely trying circumstances. Dismissed in recent years as hopelessly dependent on a gradually disappearing (i.e., absorbed into the Israeli mainstream) Russian-speaking electorate, Liberman’s performance at the finance ministry has thrust him back into the center of Israeli politics.

Finally, we cannot ignore Mansour Abbas, the first leader of a mainstream Arab party to play a major role in Israeli coalition politics. He has emerged as a master politician. He maneuvers effortlessly in prime-time Hebrew-language interviews that leave primarily-Jewish audiences gasping at his political savvy. He has not allowed his ‘Islamist’ label to get in the way of collaborating with right-wing politicians.

The new budget awards the Israeli Arab sector NIS 30 billion (just under $10 billion) for infrastructure, schools and fighting crime, and Abbas gets the credit. And because he can prove that before joining Bennet’s coalition he was energetically wooed by Netanyahu, he and Bennet/Lapid enjoy virtual immunity in the face of Netanyahu’s latest tactic of accusing the coalition of dependency on Islamist votes.


Q: Have the Haredim lost politically by blindly following Netanyahu?

A: Definitely. The triumphant coalition, without ultra-Orthodox Haredim but with Orthodox leaders like Bennet, is already busy liberalizing the entire national Kashrut (Jewish dietary restrictions) and marriage set-up. The militantly secular Liberman is happily stripping Haredi institutions of some of their funding. The Haredim can only blame themselves for doing the Likud’s bidding and boycotting parliamentary life, including vital Knesset committee work, thereby easing the coalition’s reformist task.

Now we’ll see whether Bennet can keep his promises to Diaspora Jewry and the local Conservative and Reform movements regarding greater Jewish pluralism. (Note that these were once Netanyahu’s promises until he backtracked under Haredi pressure, and that now Netanyahu eggs on the Haredim against Bennet regarding issues like pluralistic prayer at the Western Wall.)


Q: You also mentioned reforms and governance. What did the budget do here?

A: First and foremost, the country can start fully functioning again after a near three-year budget hiatus. That means money for delayed mass transportation infrastructure plans to overcome national gridlock on the roads. The IDF can resume developing its long-term plans: this week witnessed a long-delayed major maneuver for army reserves in Israel’s north. The health, education and housing sectors all benefit considerably from the new budget.


Q: Now that there’s greater political stability, what major challenges does the Bennet/Lapid coalition nevertheless face?

A: The coalition might enjoy virtual immunity from opposition efforts to unseat it. But it still has to hang together. Bennet and Lapid have to find ways to reward disgruntled politicians like Defense Minister Gantz, Labor leader Michaeli and Meretz leader Horowitz so they don’t pick up and leave in frustration with the government’s dominant right-wing. Raam’s Abbas might yet prove vulnerable to attack from his fellow Arab MKs in the Joint List. In other words, with a bare 61-vote majority, this coalition could still collapse from within.

Assuming it doesn’t, it still faces plenty of controversy, much of it involving--guess who?--Netanyahu. The coalition will shortly approve a national commission of inquiry to look into the submarine scandal, including Netanyahu’s possible involvement in issues of bribery and mismanagement of relations with Germany and Egypt. The government has to appoint an attorney general, a key post where Netanyahu’s legal woes are concerned. Covid-19, currently well under control, could rear its head again. And Justice Minister Saar insists on passing a controversial law to prevent an indicted politician (again, Netanyahu) from serving as prime minister.

At the broader, strategic level, the coalition has to address three major challenges: Iran--both nuclear aspects and across the border in Syria and Lebanon; the Palestinian issue in both Gaza and the West Bank; and relations with the Biden administration. Netanyahu had clearly defined strategies in all three spheres, all of which failed.

Bennet, then, has an easy act to follow. But he has yet to develop coherent strategies of his own. And a major flare-up, particularly regarding the Palestinians, could catch Bennet flatfooted with a coalition so diverse that it is virtually incapable of developing new initiatives.


Q: Bottom line?

A: Bennet, Lapid, Liberman et al are not saints. Lapid, who had promised voters to get rid of nepotism and slush-fund fossil institutions like the Jewish Agency and the Jewish National Fund, was this week caught appointing his sister-in-law to the board of the JNF. That means that in many ways, it’s now back to politics as usual. Still, the coalition leaders have made history and look poised to enjoy the achievement.

A big question mark remains with regard to Netanyahu: will he stay on as head of the Likud and of the Knesset opposition? His ongoing trial on corruption charges is currently not a major issue, if only because Israel’s wheels of justice look set to turn at a snail’s pace for years to come. But now that the budget has passed, life in the opposition is becoming an unhappy fact of life for Likudniks who for 12 years had known no reality other than the spoils of power.

Prominent and ambitious Likud politicians like Hanegbi, Katz, Edelstein and Barkat are grumbling. Who will challenge the fallen Netanyahu? Hanegbi just published a book proclaiming his strategic calling card. Edelstein has already thrown his hat in the ring. Leadership primaries are in the air. A faction of four MKs could bolt the Likud and offer to join the coalition which, lest we forget, is already led by ex-Likudniks Bennet, Saar and Liberman.

Israeli politics will be interesting in the months and years ahead.