Israel has been an extremely deeply socialist state from the start and the work of Likud PMs Begin and Netanyahu 1.0 cut up a lot of that and increased economic freedom. Netanyahu 2.0 has had other difficulties to deal with that distracted from economics and he has a coalition that may not be keen on such changes. However, Israel did weather the recession wonderfully, which may be a testament to the work of Likud. Assuming Netanyahu is reelected prime minister, he will likely have a stronger mandate (even if it is less seats) to pursue economic changes. Most of the right wing in Israel opposes the US money, but its quite likely the US forces it on Israel in order to control Israel. Netanyahu phased out the economic aid in the 90s, he hopefully will work to phase out the military aid. As for the EU, I think you are confusing the PA with Israel. The PA receives millions and millions from the EU. Israel receives about nothing.
Lieberman: Knesset panel should review attack on IDF soldier in Nabi Saleh (Haaretz)
from the article: Has the right-wing lost its mojo? It's too soon to tell