“The Prime Minister has decided to do anything to stay in power”.
Thus spake former Treasury Minister Yair Lapid, condemning Netanyahu’s concessions to the Ultra-Orthodox parties. The content of such criticism, levelled by both Lapid and ex-Foreign Minister Lieberman, is more or less correct. The budget agreements and VAT scheme made with Shas and the United Torah Judaism party will both add to the swelling deficit, hurting economic growth, and perpetuate the pattern of poverty afflicting the Ultra-Orthodox.
Economically, the new spending and 0% VAT on basic items make little sense. Israel’s top economists, including Bank of Israel chief Karnit Flug, have made it clear the state must sharply reduce spending. Government spending has already surged this year, rising from 40% of GDP to 48%. And the VAT plan, proposed by Shas head and ex-convict Aryeh Deri, not only raises the already troublingly high deficit, but will likely do little to reduce the cost of living as consumption of tax-free items tends to rise and increase market prices.
Who’s To Blame?
Indeed, there is a great deal wrong with the coalition agreements signed recently between Netanyahu and his new coalition members. But whose fault are they? After all, who brought down the previous government over the largely symbolic Jewish State bill? Who made new elections necessary? And who gave Netanyahu no choice but to build a narrow coalition with the Ultra-Orthodox?
It was Yair Lapid, of course. Yair Lapid who marketed himself as a pragmatic leader seeking to remove narrow-minded dogmatic politics from government. Yet it was Yair Lapid – along with Justice Minister Tzipi Livni – who effectively dismantled the coalition from within.
Rather than compromise and receive nearly all of what he wants, Lapid has demonstrated the same small-minded absolutism which led the Israeli right to commit electoral suicide in 1992; capsizing the Shamir government, splintering the field in the subsequent election, and paving the wave for Rabin’s leftwing coalition and the Oslo Accords. Lapid’s party has already paid the electoral price, losing 8 of its 19 seats.
Now his agenda, too, is under threat, as many of his economic and social reforms will likely be undone. As he sits in the opposition and watches helplessly as his achievements are dismantled one by one and his Orthodox foes given unprecedented control in a dangerously narrow government, it’s natural for Lapid to lash out bitterly. Perhaps the hardest pill for him to swallow is the now obvious fact that he made a mistake – this is all his own doing, and no one bears more responsibility for the makeup of the new government than he.