What to expect from the new Israeli government

Netanyahu’s election result defied expectations; will his conduct in his third term in office do the same?

Last month, in spite of expectations, Binyamin Netanyahu and the Likud Party were able to win a clear victory in the Israeli elections, gaining thirty seats in the Israeli Knesset, six ahead of rival Yitzhak Herzog’s Zionist Union. With a coalition still under negotiation the makeup of the next government remains a mystery, but the present author is doubtful that there will be much change in Israel’s economic or foreign policy.

Netanyahu’s election reaffirms that the country’s primary concern is security. It appeared during the campaign that Israel had finally begun taking into account the serious socioeconomic issues facing the population. The average income of the richest 10% is approximately 14 times higher than the lowest 10% in Israel; income inequality is amongst the worst in OECD countries. There is certainly a vocal outcry over such inequalities, but Netanyahu was able to avoid this issue by taking votes from other right-wing parties. His now infamous declaration that there would be no Palestinian state, and warning that Arab voters were “descending in droves on the polls” on Election Day, seem to have worked. HaBayit Hayehudi, a religious nationalist party, lost four seats, and Yisrael Beiteinu, a secular nationalist party, lost seven; whilst the Likud party gained twelve. With Isaac Herzog’s Zionist Union Party actually gaining 3 seats, it seems that Netanyahu did not grab voters from the left. Rather, Netanyahu successfully gained more support from the Right, and it appears that the government he forms is likely to reflect Likud’s right-wing support based. Some reports have shown, for instance, that Netanyahu intends to keep Avigdor Lieberman, who notoriously suggested in March that disloyal Arab Israelis should be beheaded, as Foreign Minister. Although some have claimed there have been attempts to form a coalition with the Zionist Union, the Likud Party claimed they would not do so due to “deep ideological differences”, and Mr Herzog has stated that he is prepared to stand in opposition.

Israel has experienced mass protests over housing in recent years.

Regarding the economy, there may be some chance for reform in the new government. The Kulanu Party, receiving ten seats in the election, was formed in late 2014 by Moshe Kahlon (formerly of the Likud Party), with the interest of tackling poverty and income inequality. There is also the Shas party, with seven seats, led by Aryeh Deri, which is focused on ending social and economic discrimination against Sephardi Jews in Israel. The Shas Party announced as early as 3rd March that they would most likely support Netanyahu as prime minister, and currently discussions are underway between Kahlon and Netanyahu to bring Kulanu and their ten seats into Likud’s coalition government. However, such optimism should be balanced against caution. The housing crisis continues, with prices having increased on average by 55% since 2010; and with more monthly salaries per citizen required to purchase property than in the United States, the United Kingdom, and various other OECD countries, according to a report by the Bank of Israel. Change in economic policy will have to sit on the hope that the Kulanu and Shas Parties will take a strong role in the coalition.

Netanyahu has sold himself throughout his political career as staunchly right-wing on foreign affairs and economic policy, taking security over peace, and business over social justice. In the last year alone, Netanyahu appropriated 1000 acres of land from the West Bank, the biggest move of its kind in over thirty years, following the war with Gaza in the summer of 2014, and approved a three year 4 billion privatisation plan near the end of last year. He has been constantly outspoken on his refusal to make a nuclear deal with Iran, as was made clear in his speech to the US Congress last month, and has consistently made unpopular economic proposals, such as in 2012 when he struggled to gain support for an austerity plan. Under Netanyahu Israel has become more focused on security at the jeopardy of peace negotiations, and the country has become more, not less, unequal. With a new coalition and new players things may well be different, but considering Netanyahu’s history as Prime Minister and the electoral base he has appealed to, the present author remains sceptical that Israel will see much change under their new government.

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