Part II

Budget

Officially, the previous government fell apart over the failure to pass a state budget. Israel has not only entered 2021 with no budget, but there is still no budget for 2020. This is a legal issue that some believe Prime Minister Benjamin Netanyahu played deliberately, not allowing his Likud finance minister to bring a budget for a vote, knowing that it would force the dissolution of the government and a new election. It may become a key issue that comes back to bite Likud, guilty of obsessive political maneuvering to the detriment of 9 million Israelis, many of whom remain unemployed or suffering significant hardship as a result of the pandemic.

Netanyahu’s Legal Issues

Over the past two years, legal allegations and the indictment of Netanyahu have been a recurring issue. Unlike last year, legal proceedings have begun, and Netanyahu has appeared in court. Despite the bad optics and weakening support, polls show him remaining “most qualified.” It’s unclear how much of that is intuitive; after all, a man holding the same position for over a dozen years has qualifications that nobody else does. Or is it an indication of remaining strong support?

Unemployment and the Economy

A year ago, Israel’s economy was strong and unemployment was in the low single digits. Today, the economy is much weaker, and unemployment hovers around 20%. While the economy is opening again, including hotels, restaurants, cultural and sporting events and more, there are many fewer Israelis who can afford dinner out or a movie.

Fall of Likud

If there are no drastic changes, Netanyahu and Likud will have no path to form a coalition. Even with Yamina and the other parties that would reflexively join a government under him, they do not reach the 61 seats needed.

Mathematically, Yesh Atid, New Hope, Yamina, Yisrael Beiteinu, Labor, and Blue and White could surpass 61 seats, even more if Meretz is added. However, the contortions needed to bridge interests and ideologies of some of the most right-wing and the most left-wing parties would be a herculean challenge.

The Arab Vote

Not included in the mathematics to form a coalition are the Arab parties because, historically, they have not supported the formation of a government for their own nationalistic reasons, and the major national parties have not wanted or needed to seek their support. This red line has been widened in recent years with the Arab Joint List in many ways serving as a fifth column, actively supporting Israel’s adversaries in many conflicts.

A growing number of Israeli Arabs feel that the Joint List is not representing their interests, reflected in the drop from being the third largest party. This is underscored by Raam, the Arab Islamist party, running on its own. It’s not clear if they will pass the threshold, but if they do, Raam brings another dynamic to the table that will be unique: the possibility of supporting the formation of a coalition if not, in fact, being part of that in some way.

Because Raam wants to be a player and not sit in opposition, it could easily throw its support behind either of the two camps’ attempts to form a government, exacting a high “price” in the form of funding for the Arab community, government positions and more. For that reason, even Netanyahu has been actively courting the Arab vote. It’s not unusual for Arabs to vote for and be part of Israel’s major national parties. This time, the Arab vote remains one of the biggest wild cards.

Challenge From the Right

It’s rare in a democracy to have an incumbent facing the strongest challenge to reelection from the same side of the political spectrum. However, the main challenge to Netanyahu and Likud this election is from the right. Gidon Sa’ar and New Hope won’t join or support a government led by Netanyahu. Naftali Bennet and Yamina are keeping options open, so people are calling him ”kingmaker.” But mathematically, if he can’t help Netanyahu form a government because they don’t have enough votes anyway, the likelihood of Sa’ar and Bennett joining forces to form a government increases.

In parallel, both Sa’ar and Bennett have said they will not sit in a government led by Yesh Atid’s Yair Lapid. While these red lines could change, one lesson from the failure of the last government is that when Benny Gantz broke his promise not to sit in a government under Netanyahu—and got played doing so—he lost credibility. His party now holds 14 seats and may drop to four, or not even make it past the threshold. Nobody wants to make the same mistake.

Because he left Likud, it’s possible that Sa’ar can do something that nobody else can—peel off Likud Knesset members after the election to join and support a government under his leadership. Others in Likud are also unhappy with Netanyahu, but haven’t had the nerve to split from Likud as Sa’ar did. Rather than sitting in the opposition, they could join and strengthen a Sa’ar-led government, minimizing the need to rely on the left-wing parties. This could propel the leader of the party with the third or fourth largest number of votes to become prime minister.

The Pandemic

The pandemic has had many ripple effects in Israel that may impact the election. Israel leading the world in vaccinations is a point of pride, but Israelis are asking rhetorically, “So what? The country is still a mess.” With the borders still closed to tourists, and Israelis unable to travel, and unclear about returning home to vote, the outcome of Israelis being stuck overseas could create a problem, even ruling the election “unconstitutional.”

Electoral Fatigue

Israelis are tired of elections. While polls may be accurate for those planning to vote, what’s unclear is how many Israelis are fed up and planning to skip the vote altogether. Or, perhaps, Israelis will swarm to voting stations to try to make a change. Either of these variables can have a significant impact in the eventual outcome and will be watched closely.

Jonathan Feldstein and the Genesis 123 Foundation will host a webinar about the election on March 18 at 2 p.m. Eastern Time / 11 a.m. Pacific Time. Please be in touch at [email protected] for more information about these
issues or to follow the outcome.