Fueling the Discontent

Netanyahu's personal intervention in fuel prices is solid evidence of what his main concern will be in the next round of elections: public awareness and the consumer foment.

You could say it's because the winter hibernation is ending; because gasoline and electricity prices are rising; or the general sense that nothing changed for the middle class since last summer. But one thing is clear - the social protest is stirring back to life.

At least three politicians are trying to ride the waves generated by last summer's protest: Shelly "Social-Democratic" Yacimovich; Yair "Where's the money?" Lapid; and the latest player, Shaul "I lead the social protest" Mofaz. They realize that socioeconomic issues are the soft underbelly of Prime Minister Benjamin Netanyahu's current government.

Benjamin Netanyahu

Even though Israel's macroeconomic statistics are decent, the public is more concerned about the microeconomics - and they haven't changed much since last summer. True, there may be more houses for sale and demand is down, but a young, middle-class couple is just as far away from affording a home. At some grocery stores, customers are paying more than they were paying last year after the Industry, Trade and Labor Ministry failed to thoroughly address the country's food market.

The committee headed by Prof. Manuel Trajtenberg, appointed to find solutions to the protest, found the country was in a bad state, yet issued relatively moderate recommendations so that the government could implement them without significantly blowing its budget. The Trajtenberg report served the government in its attempt to calm the protest, and also the protesters by stating that their complaints were justified.

Meanwhile, spiking oil prices are throwing fuel on the flames by translating directly into higher gasoline and electricity prices, due to the lack of Egyptian natural gas imports (which let the Israel Electric Corporation manufacture electricity more cheaply ). In this case, geopolitics are working against the government. Netanyahu, whose ratings improved significantly in the months after the last round of protests ended, wants to quell the sparks that could reignite the flames, and is using his full weight to keep the Finance Ministry from pulling in excess taxes on the back of higher fuel prices.

Finance Minister Yuval Steinitz, who knows that the next year will be a high-pressure one in terms of the international geopolitical and financial situation, had expected that the higher fuel prices would automatically bring the state a few extra hundred million shekels without any real effort, since some of the taxes are based on percentages of the price. But the Israeli public's consumer awakening means the state won't be getting those shekels without a fight.

The prime minister's personal intervention in fuel prices is solid evidence of what his main concern will be in the next round of elections. He's not worried about Mofaz, Yacimovich or Lapid. He's scared of the public awareness and the consumer foment.