Netanyahu - AP - August 7, 2011
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Prime Minister Benjamin Netanyahu said Monday that he understood he must change his fundamental positions on Israel's economic policy, a senior cabinet source said.

Netanyahu told Professor Manuel Trajtenberg, the head of the panel of experts who will talk with protest leaders, that he understood it was necessary to change economic policy. But Trajtenberg went further, telling Netanyahu he had to change his fundamental positions. Netanyahu agreed and said he had read a new book about how Herzl adapted himself to changing circumstances.

"I understand my views need to change," Netanyahu reportedly replied.

Netanyahu said he was ready to change the tax policy he had introduced in recent years, but Trajtenberg said this was not enough, and that priorities needed to be changed, the source said.

The two agreed that in any case, the government would not overspend its budget and the changes would apply to internal priorities.

Trajtenberg asked Netanyahu for several commitments, starting with a personal commitment to pass the panel's recommendations in the cabinet and prevent the politicians from dragging out the discussions indefinitely, as they had done with numerous committees in the past.

"There's a system in Israel to set up a committee and then kill the issue," Trajtenberg reportedly said. "Another panel with all the familiar faces will be no good here. Unless the political leadership unites behind the recommendations, it won't work," he said.

Netanyahu agreed to this demand as well, the source said.

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Trajtenberg reportedly said in closed conversations that the global economic crisis must not be used as an excuse not to deal with the Israeli crisis seriously. He told Netanyahu a large part of the panel's work would be not only in formulating recommendations but in dialogue with the protesters.

"My daughters took part in the demonstrations," he told Netanyahu. "We must listen and touch base with the other side. We need social sensitivity not as a slogan but as a characteristic of the panel members."

Netanyahu agreed to give Trajtenberg a free hand in selecting the panel members and not to include politicians in the panel. "It's either ministers or a professional panel," he said. "The ministers are the deciders and we will submit our recommendations to the socio-economic cabinet."

The socio-economic cabinet will review the ideas and submit its own recommendations to Netanyahu by the end of October. Netanyahu may make additional changes, after which he will submit a final draft to the cabinet for approval. That is supposed to happen in late October or early November.

Trajtenberg intends to address the dialogue with the protest leaders in Tuesday's meeting, in a bid to hold talks with as many of them as possible. "This is not negotiations with a workers' union. We must hear the people, those 350,000 people who demonstrated because they hurt," he said in closed talks on Monday.

"We must leverage this protest for real change, it's burning in my bones. I don't know if I'll succeed. But we must take the risk," he reportedly said.

The socio-economic cabinet appears to be a serious forum, with the prime minister, finance minister and 15 other ministers and a deputy minister.

But a glance at the cabinet's decisions in the past year shows the debates were not always about overall policy but about more minor issues. The cabinet received a report on the Dead Sea infrastructures, dealt with driving regulations pertaining to state-owned vehicles and approved an insurance subsidiary for the Israel Post.

Sources who took part in the cabinet's work said yesterday many of the ministers don't take part in the discussions and even the prime minister, the forum's chairman, leaves them to his substitute, Steinitz.

"I can't remember when the prime minister conducted a cabinet meeting and I don't think he remembers either," a source said.

"Even when he told the ministers the Trajtenberg team's conclusions would be submitted to the social cabinet he said, without blinking, that Steinitz heads the forum," the source said.