Even if the next government looks more or less like the current one, the decision to move up the election to April is a good development for the economy. Most of 2018 was run as a preparation for the election, with a host of legislation and machinations aimed at bolstering Prime Minister Benjamin Netanyahu and improving the standing of ministers like Miri Regev (the cultural loyalty bill), Ayelet Shaked (the legal advisers bill) and Naftali Bennett (building an image as a potential defense minister).
Also, Netanyahu and Finance Minister Moshe Kahlon surrendered to lobbying by the police – including police retirees – the Mossad and the Shin Bet security service that will cost Israeli taxpayers 22 billion shekels ($5.8 billion).
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Avigdor Lieberman’s departure as defense minister upended the balance in the governing coalition, and it has become impossible to advance many initiatives. It might seem this situation is perfect: A narrow coalition preempts the passing of dubious bills and makes the prime minister navigate the various security fronts with excessive caution.
But the police deal unveiled something very worrying. Even though Netanyahu and Kahlon believed there was no room for signing such a costly agreement that eats into civilian budgets in the coming years, both wanted to be the good cop. And such concessions are costing the state 22 billion shekels and counting.
The message telegraphed by this behavior is one of economic irresponsibility, a message that very quickly gets picked up by blackmailers and opportunists. It’s very tough to run a country this way, and it’s certainly hard to preserve the current government’s achievements – whether it be the low unemployment, the reduction of socioeconomic gaps and fiscal responsibility. The impression created by the government in recent months is that all these achievements could crumble with the next election.
But the thought that Netanyahu decided to go to an election because of his concern for the economy is naive. A reminder: Netanyahu decided to go to the March 2015 election after accusing then-Finance Minister Yair Lapid and then-Justice Minister Tzipi Livni of attempting a putsch. He claimed they were working against the government regarding the Iranian nuclear issue, negotiations with the Palestinians and construction in Jerusalem.
But two years later Netanyahu gave a completely different reason: the so-called Israel Hayom bill that would have limited the circulation of that free tabloid traditionally close to Netanyahu. The prime minister said that, two years earlier, he sought an election because people in the government were subverting his efforts to block that bill.
All this happened following the revelation of Netanyahu’s quid-pro-quo conversations with Yedioth Ahronoth publisher Arnon Mozes (Case 2000), whose paper competes with Israel Hayom.
This bill also got him into trouble when he concentrated all power in his hands in the communications industry and allegedly acted in a conflict of interests with his friend Shaul Elovitch to advance Bezeq’s interests (Case 4000). The attorney general thus forced Netanyahu to yield the communications portfolio.
This reminder is for anyone who thinks the government is falling over the bill to draft the ultra-Orthodox into the army, the conversion bill or budgetary worries. Netanyahu’s main concern lies with the corruption investigations against him, which are what have gotten the current election cycle going.
Netanyahu probably feels he can get to April 9 without an indictment; for example, a pre-indictment hearing can be postponed on the grounds of election preparations, the security situation and/or the prime minister’s frequent visits abroad.
What has been totally clear in recent months is that Israel’s economy can’t wait for Netanyahu’s considerations. Despite the achievements of recent years, in recent weeks we’ve seen worrying developments in the increased cost of living, volatility in global financial markets and fears of a crash, an increased budget deficit that could worsen in 2019, and a delicate security situation on three fronts that may seem under control but could quickly deteriorate.
These challenges demand serious attention and an ability to look far beyond the coming election. A government at the end of its term can’t make tough decisions; every action is examined through the election prism. The result is paralysis at best and expensive, populist decisions at worst.
An early election will put an end to the budget-busting legislation that serves politicians and not the public. Because of the early election, not much will be advanced over the next six months regarding the economy, but at least the uncertainty on the timing of the election has been lifted.
In six months we’ll have a new government. Maybe the composition will be similar, maybe not, but it will be the kind that has enough time to make long-term decisions, not provide Band-Aid solutions.
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