Analysis |

With This Bombshell Resignation, Netanyahu Completes Erasure of Likud’s Old Liberal Elite

A paragraph at the end of departing budget chief Shaul Meridor’s letter hints at a divide within the Israeli right wing over much more than just financial policies

Anshel Pfeffer
Anshel Pfeffer
Netanyahu at a government meeting with then transportation minister and current finance minister, Yisrael Katz, Jerusalem, February 24, 2019
Netanyahu at a government meeting with then transportation minister and current finance minister, Yisrael Katz, Jerusalem, February 24, 2019Credit: Abir Sultan / POOL EPA / AP
Anshel Pfeffer
Anshel Pfeffer

Most of the attention sparked by budget department chief Shaul Meridor’s bombshell of a resignation letter on Sunday has been on the allegations of monetary shenanigans in the Ministry of Finance – especially his accusation that Minister Yisrael Katz has been “trying to change budget estimates in order to create fictitious sources (of funding) to allocate additional budgets.”

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These are serious issues, perhaps even of a criminal nature, and a translation of the letter is without a doubt already with the international credit-rating agencies currently reassessing Israel’s status. But there was an intriguing paragraph at the very end of Meridor’s letter that will probably be unintelligible to the economists at Moody’s and Standard & Poor’s, but hints at a divide within the Israeli right wing over much more than just financial policies.

“I was raised in a home that educated to national and public service, almost at any price,” wrote Meridor. “I endeavored to carry out my service in the light of Betar ideals – hadar and tagar – and for the entire public. To my regret, these values have been forgotten.”

Hadar and tagar, those untranslatable terms from Zeev Jabotinsky’s old Betar anthem, written for the youth movement of the Zionist Revisionists, can roughly be explained as a combination of glory and decorum. For financial journalists following Meridor’s meteoric career as one of Israel’s most powerful civil servants and architect of the tycoon-friendly Mediterranean natural gas plan, the fact that Meridor had values other than ultra-neoliberalism will come as a surprise. But the hint can be found in his name.

Meridor is the grandson of Eliyahu Meridor, one of the founders of the Irgun, the Revisionists’ pre-state paramilitary underground, and a Knesset member from the Herut party, Likud’s forerunner. Shaul’s father is Dan Meridor, a former Likud minister and faithful aide to Menachem Begin in the twilight years of his leadership. Begin, who had lost eight elections to Labor before finally becoming prime minister, astonished the Israeli civil service when coming to power by not replacing the officials of the previous administrations. “We have no intention of plundering power,” he told them.

Begin and his close circle insisted that the civil service remain professional, despite knowing that many of the top officials did not share their political views. This may have won him begrudging admirers, but it also created a growing sense of resentment among some right-wingers toward “polite” and “liberal” Likudniks of his kind, “who don’t know how to rule.”

Benjamin Netanyahu has been determined, since first rising to power in 1996, to prove that he is not that kind of Likudnik. His longevity as leader of Likud has obscured the fact that he once was seen as an outsider in the party. His father, Benzion, may have been a staunch Revisionist, but he never got along with Begin and as a result did not join Herut or Likud.

In the Netanyahu household Begin was seen as unworthy of bearing Jabotinsky’s mantle and in 1987 when Bibi officially joined Likud, by then under the leadership of Yitzhak Shamir, he was seen as a rival of the new generation of leaders – “the princes,” sons and daughters of the Irgun’s founding generation, including Dan Meridor and Begin’s own son, Benny.

Netanyahu easily overtook both of these “princes” in the party primaries. They both served as ministers in the first Netanyahu government, before resigning in protest over the young premier’s policies. But both later returned to his second government, in 2009, in the belief that things would be different. Both eventually left politics disappointed and are today totally estranged from Netanyahu, publicly declaring they won’t vote Likud under his leadership.

Shaul Meridor is a third-generation Likud princeling – although instead of joining the party, he went into the civil service’s most elite branch: the Finance Ministry’s budget department. Until recently, it seemed that his father’s bad blood with Netanyahu was not a hindrance. In his previous position as director general of the Energy Ministry, to which he was appointed at the age of 38, Meridor worked closely with Netanyahu acolyte Yuval Steinitz on the natural gas plan, one of Netanyahu’s pet-projects.

The budget department chief, the role Meridor took over in 2017, holds the purse strings for the entire government. Since the economic program of 1985, which reined in Israel’s long period of hyper-inflation, the “treasury boys” – a small group of young, arrogant economists – have wielded inordinate power and this has usually worked well for Netanyahu, who favors their department’s fiscally conservative philosophy.

Bibi also didn’t seem to have any problem with Meridor himself, until a month and a half ago, when he publicly attacked him on his Facebook page, writing that “it is inconceivable that bureaucrats are briefing [the media] against decisions made by the government and are working to thwart them. We won’t accept it.”

Meridor’s sin was being quoted in the media criticizing Netanyahu’s sudden decision to dole out cash grants to Israelis four months into the coronavirus pandemic. His time was limited and Minister Katz, who had got the message, began keeping him out of key meetings.

Meridor’s letter of resignation is to Katz. Netanyahu is not mentioned. But it’s clear that he’s aiming at the prime minister when he writes there about the lack of any serious budgetary planning since the beginning of 2018, about the politicization of public finances and about “those who called me and my colleagues ‘terrorists’ and tried to delegitimize the diversity of opinion in the public service.”

Meridor is no man of the people. He was literally born into the serving elite of Israel and was happy to serve Netanyahu’s agenda for years. But Netanyahu is on the warpath against the civil service. Until recently it was the legal branch that was in his sights – for daring to indict him for bribery and fraud. Now it’s anyone he can blame for his mishandling of the COVID-19 crisis and the recession. The budget department, one of the last bastions of the professional elite, has been marked for destruction.

The elite Meridor belongs to could in the past coexist with Likud, even be a part of it. But the Likud of Dan Meridor and Benny Begin, and certainly that of their parents, no longer exists. The young Meridor’s claim to upholding the movement’s old ideals is quaint and has no place in today’s Likud, which has been transformed from one of Israel’s oldest ideological parties into a personal platform for the ambitions of one man.

Finance Ministry budget department director Shaul Meridor, December 31, 2019Credit: Tomer Appelbaum

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