Since coming to office in June 2021, the new Israeli coalition government has been working with little fanfare or public controversy. So far, its main decisions and issues that have been addressed by this new coalition since its establishment.

COVID-19 

After Israel fully reopened, the number of COVID-19 cases are slowly rising across the country. The new government is working to address this new surge while also trying to avoid broad moves including national lockdowns or reintroducing state-wide restrictions. The Corona Cabinet is attempting to enact measures — including restricting closed-venue events to vaccinated individuals only, and mask requirements for large open-air gatherings — in order to avoid a general lockdown that might occur during the Jewish High Holiday period.

Current restrictions include full quarantine periods for those returning from certain countries — while also trying to keep the country open for the time being — and enhancing enforcement for violations. Israel has also ramped up its testing capacities and is preparing for the new school year in September.

State Budget 

The major issue facing the new government was passing a budget, a move that would cement it and prevent its collapse. Following three years when the county did not have a budget, an approved budget would not only reaffirm the government’s stability but also indicate its strategic directions and future priorities. Last week it unanimously approved a 2021-2022 budget which will now be moved to a vote in the Knesset.

The new budget allocates billions of shekels to the health sector while also executing a broad 1.5% cut across all governmental offices. Additional elements were a budget increase to the security and defence budget, agricultural reform, raising the retirement age for women, and reducing limitations on imports. The specific details of the new budget are not overly dramatic — the increased health budget being the most significant change — but its introduction and approval which marks an important milestone and bodes well for the government’s chances of survival. The battle in the Knesset over its approval is likely to be difficult, but it appears that the budget will pass.

Security

On the security and defence front, the new government’s main challenge continues to be Iran. Incidents in the Persian Gulf contribute to sustained tension between Israel and Iran, and there are voices in the government calling on it to be more aggressive and retaliate. However, Prime Minister Naftali Bennet want to exhaust all diplomatic channels and not resort to force. Israel’s current efforts are focused on amassing evidence and data against Iranian aggression in the Gulf to motivate international action. This suggests that it will adopt a more moderate line of working in tandem with the international community rather than adopting unilateral action.

At the same time, the Iran is not the only issue. Israel’s High Court is gearing up to discuss the appeals of the Palestinian families in East Jerusalem’s Sheikh Jarah district in, against their eviction from their homes. Tensions and protests have escalated including in the Temple Mount. In the West Bank, four Palestinians were killed in separate incidents last week and, without containment of these various arenas, a nationwide escalation could be seen once more, with Hamas always likely to contribute by firing rockets from Gaza. So far, the new government is holding true to a line of moderation and avoiding escalation, but the situation remains fragile. Another violent escalation would be a serious test for this new government, whose ideologically disparate members may find it very difficult to maintain their unity when faced with such challenges.

Monfort Advisory brief, August 2021