The Shekel Drops / Steinitz, Man Up and Threaten to Quit

This Sunday, Netanyahu declined to back his finance minister yet again, withholding support for the Sheshinski Committee's conclusions.

Too often over the last two years, Benjamin Netanyahu has humiliated his finance minister. At the very start of his second term as prime minister, Netanyahu made it clear that he wouldn't be making Yuval Steinitz's life easy. Even as he announced his surprising choice of a doctor of philosophy as finance minister, to the dismay of the business sector, Netanyahu explained that he was also appointing himself uber-minister of economic affairs. He set the stage to lord it over Steinitz.

When the first national budget in Steinitz's career as finance minister was being prepared, Histadrut labor federation chairman Ofer Eini and Netanyahu's economic adviser at the time, Uri Yogev, met behind closed doors to hash out a deal, leaving Steinitz and his officials outside. Netanyahu also twisted Steinitz's arm over the defense budget.

steinitz - Emil Salman - January 11 2011
Emil Salman

In fact, that became the norm: The prime minister simply overruled Steinitz's decisions - for instance, over value-added tax on fruit and vegetables. "Be a man, fold," opposition leader Tzipi Livni quipped at Netanyahu in the Knesset. And indeed, the prime minister showed his mettle and folded - at Steinitz's expense.

This Sunday, Netanyahu again declined to back his finance minister, when he declined to support the Sheshinski Committee's conclusions on the state's take from the exploitation of gas reserves found in Israeli territory.

The committee is Steinitz's baby. And not just any baby: If the Sheshinski recommendations are accepted, it would be his biggest achievement as finance minister (if we leave aside the coup of creating a two-year budget, with longer-term horizons than the usual one-year budget can provide ).

But what Netanyahu said on Sunday went far beyond merely failing to back his finance minister.

Naturally, the prime minister and cabinet may make up their own minds about the merits of the Sheshinski recommendations. But the question is why Netanyahu felt it necessary to clarify that the whole issue would now be revisited, opening the door to another onslaught by interested parties and their lobbyists, to more protests and mud-slinging.

"I will meet with the ministers of finance and infrastructure, and with the governor [of the Bank of Israel], and then with the investors in Tamar [a proven gas discovery], and I'll decide what recommendations to bring to the imminent cabinet vote," Netanyahu said. Or in other words, the finance and infrastructure ministers hold diametrically opposed views of the matter (which they do ), so he, the prime minister, will find a compromise.

But the committee headed by economist Eytan Sheshinski was appointed by the cabinet and staffed by officials from several ministries, including the Prime Minister's Office itself, as well as external experts. It spent long months studying the issues at stake, hearing from all the parties, studying precedents, listening to legal opinions and comparing the situation in Israel with the rest of the world. Only then did it consolidate its recommendations.

True, Netanyahu didn't say he wouldn't accept its recommendations. Maybe he will. But his tone was suspect. Even more suspicious was his next sentence: "I will recommend establishing a national fund that will use the gas revenues for important purposes, defense and education." No need to consult with anybody. Netanyahu has the answer.

If Netanyahu softens the Sheshinski recommendations, he will effectively obliterate his finance minister. But worse, he will be running roughshod over the principles of good governance.

If that happens, Steinitz should show leadership of his own - or as Livni puts it, be a man. He should tell Netanyahu: Either support Sheshinski, or I quit.