Is Israel going to have another election much sooner than expected, much sooner than needed, and much sooner than what most of its parties want? There is still a good chance that the coalition is going to survive, but also signs that it might not. Too many people are climbing too many trees that are too tall – and for politicians the climbing down is a painful process… So the election chatter is intensifying, and when there is chatter, even if there is no will, the result can be unfortunate.
What is the potential political crisis all about?
It is about money – the budget for next year. In crafting this budget there are several complications to overcome. One – the military wants a lot more funds following the Gaza war, and the Prime Minister generally support the demand for more funds for defense and security. Two – Finance Minister Yair Lapid committed himself to a. no new taxes and b. passing a zero-VAT reform for lowering housing prices. Three – all the experts, and now the PM, believe that the zero-VAT scheme is ludicrous and is not going to work. Four – the PM also doesn’t want a larger deficit, Lapid's apparently preferred source for the missing funds.
All these are solvable problems, and the general belief in Israel is that another round of elections isn't going to be called because of monetary difficulties. And yet, there is drama. Mostly because of Lapid’s affinity for climbing trees. For months he threatened that if his zero-VAT idea will not pass, the coalition isn't going to hold. The Gaza war gave him an opening to climb down the tree – but he kept insisting on legislation in which no one but him believes. So the PM faced a dilemma: should he back Lapid to save the coalition or shelve the legislation to save Israel money in a difficult financial moment?
Netanyahu decided to wait – and then wait some more – until yesterday, when the zero-VAT legislative process was frozen by Netanyahu's fellow Likud member, coalition chairman Yariv Levin.
Does this mean that Netanyahu wants an election?* No. It is not even clear if he specifically approved Levin's decision to freeze the legislative process (some say he did not). Netanyahu is an experienced politician, and even though his chances of winning another round seem good, he knows better than anyone that once elections are called all bets are off.
Does this mean he thinks Lapid wants an election? No reader of polls – and Netanyahu is a reader of polls – could reach such a conclusion. Take a look at Yesh Atid's miserable performance in recent polls (our poll tracker is updated), and see why it doesn't make much sense for Lapid to want an election**.
In fact, that might be the reason for the crisis: Netanyahu (or Levin on his behalf) saw a weaker Lapid and decided to gamble – and have Lapid face a tough dilemma: should he keep his word and very possibly ruin his party, or be humiliated, which also means, possibly, some real political damage. Lapid, responding to the challenge, did what gamblers tend to do: he doubled down, explaining that “a coalition that does not keep its promises cannot survive”.
But he seems amused, and Netanyahu seems relaxed, so there might be reason to be optimistic about the ending of this mini-drama: Netanyahu doesn't really care much about passing the zero-VAT legislation, but he saw an opportunity to hold it hostage until Lapid caves on the issue of the Defense budget. If Lapid acquiesces on Defense, Netanyahu will give him in return his darling zero-VAT law. Of course, in such case, both Netanyahu (and Defense Minister Yaalon) and Lapid will all get what they wanted – but the problem remains: where will the money come from?***
These are the types of petty questions that only Israel's citizens might worry about, while their politicians bicker over larger things.
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* Another option he might be toying with is that of an alternative coalition without Lapid and with the Haredi parties. But at least for now, such a coalition can't be formed because Avigdor Lieberman, the head of the Israel Beiteinu Party, opposes such a move, for unexplained reasons, like most other Lieberman preferences.
** The only party in the coalition that might benefit from a fast round of elections is Naftali Bennet's Habayit Hayehudi. Bennett was successful a couple of days ago in overcoming internal opposition and passing a new party constitution. Dangling the 18-19 possible seats that the polls project for his party made that relatively easy for him.
*** Taxing is no option, because Lapid made a commitment to not raising taxes very similar in tone and nature to the one he made on zero-VAT (my way – or no coalition). Increasing the deficit is an option, because Netanyahu, while he seems to oppose a larger deficit, had the wisdom not to make threats that will eliminate his one remaining option to keep his coalition intact.
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