The rotational agreement stipulates that Netanyahu will continue to serve as Prime Minister for the next 18 months, followed by Gantz. The unity government is the largest government in Israel’s history, with 36 ministries divided between Gantz’s Blue and White party and Netanyahu’s Likud. The road to this government was long and full of twists and turns, and many thought we would end up seeing a fourth election. Instead, we have to wait and see a government formed in haste, bringing together the Prime Minister whose criminal trial starts in May and the rival who was carried to power on the promise of not sitting with Netanyahu in the same government.

Let’s understand how we got here and what is in store.

The third national election did not resolve the political standstill with neither political camp having the coveted 61 votes to form a majority government. However — because of its first kind move by the Arab Joint List which supported Gantz in trying to form a government — Benny Gantz, of Blue and White, was given the mandate from the President to try and form a government.

His attempts were thwarted. A minority government, supported by the Joint List from outside, was out of the question because of the staunch opposition from hard-liners within his own party. The Coronavirus made a fourth election an impossibility. And so Gantz made a move, which is likely to have cost him his political career by choosing to use his mandate to help his opponent, Prime Minister Netanyahu, form a unity government.

This was astounding for several reasons:

• First, it constitutes a betrayal of Gantz’s only promise to his constituents and the main reason he won as many votes as he had: to refuse to sit in the same government as Netanyahu and his three criminal indictments.
• Second, in making this move, Gantz essentially dissolved the Blue and White political union with his partners — Yair Lapid and Moshe Ya’alon who strongly objected to sitting with Netanyahu — splitting from Blue and White. Basically, Gantz personally dismantled the only serious opposition to Netanyahu and, if there were to be another election, he would have little credibility and a diluted party. Notably, he did all this before a unity government agreement was even so whatever leverage he had over Netanyahu was thrown away before entering negotiations.
• Third, Gantz displayed his naivety by believing that in making these gestures — breaking with his own party leadership — he would enter into a unity government, where he would serve as Prime Minister after a year and a half.

Obviously, after making his announcements, Gantz quickly learned that, whatever agreements were previously made, they were now void. Netanyahu’s eagerness to form an emergency unity government to fight the Coronavirus suddenly disappeared, and the negotiations began circling around issues that had nothing to do with the fight against Corona. Instead it was about rules and regulations that revolved around appointing judges which is of interest for Netanyahu whose trial is meant to begin in May after it was delayed because of COVID-19. His reappointment as premier will make it impossible to legislate against him and ensure that he retains an official residency even if he leaves office. Gantz was basically played by Netanyahu who now has every reason to go to another election: his main opponent is dead in the water, so a slam dunk for Netanyahu.

Gantz certainly had reasons to agree in principle to a unity government. His justification was the national fight against COVID-19 and he did not have many other options. Negotiations between Likud and Blue and White continued for weeks, while the time allotted for Gantz to form a government ended, and the president passed the mandate to the Knesset. The main obstacle in the negotiations was Netanyahu’s insistence on having veto power over appointing judges and other issues that help shield him from the law.

The new unity government is the largest ever with ministers from Likud, Blue and White, and even two politicians from the Labour Party who broke ranks to join the government. The very lengthy agreement is convoluted but the highlights are: a rotation agreement between Netanyahu and Gantz after 18 months; a joint promise to not dissolve the Knesset or neither of them could serve as Prime Minister; effective control for Netanyahu over many legal appointments; and plans to annex the Jordan Valley and parts of the West Bank.

The only remaining pending issue is whether the Supreme Court will consent to Netanyahu forming a government who is under the indictment. Currently the law currently does not forbid this but the court has been asked for a judgement on the rule which includes parliamentarians and ministers include Prime Ministers. In the unlikely event that the Israeli High Court of Justice rules that Netanyahu cannot form a government, there will have to be another election.

Besides the political drama, the COVID-19 pandemic has understandably captured most of the public’s attention. So far it is the interim government which is handling the situation so it is mainly Netanyahu who is supervising the efforts and he is casting himself as the Corona Tzar. His interest in a unity government with Blue and White is no doubt partially motivated by an interest in having a scapegoat for the inevitable future economic strife. Israel has been relatively early in enacting strict restrictions and social distancing measures which seems to have been effective. The number of positives cases are starting to come down, and its spread is largely under control in most areas of the country. This week, the government announced some easings of the restrictions because fortunately the feared collapse of the health system did not materialise. Currently, with the curve flattening, the major issue on residents’ minds is the economic crisis. Israel responded swiftly to the virus’s health hazards but has been slow to provide answers about the economic consequences. So far, no real aid package has been announced, with the exception of a handful of limited gestures of assistance that have done little to help those in need. Unemployment is very high and will not fall as long as social distancing measures continue. If Netanyahu has something to fear at the moment — having squashed his political rivals and retained his premiership for another 18 months leading a broad and stable coalition with potential scapegoats — it is growing unrest and anger about the economic crisis that is about to escalate.

This is provided by Monfort Advisory Brief / April 2020 – for further details please email info@menas.co.uk