An analysis by Yohanan Plesner, president of the nonpartisan Israel Democracy Institute.

When Israel's 35^th Government was finally sworn in on May 17, many breathed a collective sigh of relief. After a year and a half of deadlock – and three contentious elections – it appeared that the much sought-after political and governmental stability had been achieved. Yet, there is no doubt that the Likud – Blue and White partnership is a tenuous relationship that has left a lot of both party’s supporters disappointed. 

Those who wanted Benny Gantz to form a center-left coalition have different degrees of disappointment. Some are merely frustrated that Gantz is not the one to go first in the rotation agreement. Other Blue and White supporters feel betrayed by Gantz who, in their minds, has turned his back on the very values he espoused when they voted for him and his party.

Similarly, those who wanted a right-religious coalition are concerned that some of their core beliefs will be placed on the back burner with Blue and White serving as senior members of the cabinet and Gantz himself set to take over as prime minister in November 2021. They fear that the changes their voters had hoped for in Israel's constitutional structure, and perhaps a more radical expansion of Israeli sovereignty in the West Bank are now on hold.

It is these mutual, but different, disappointments that underlie the challenges at the heart of this new government. On top of all of this is the question of whether both sides can truly trust each other and whether Benjamin Netanyahu really intends to relinquish the Prime Minister's Office to Gantz in November 2021. These challenges, if not managed properly, could very well lead Israel back to elections.

The Legal Cloud

The explanation Netanyahu and his coalition partners gave for dispersing the Knesset back in December 2019 was their inability to pass a recruitment bill as demanded by the Supreme Court. In reality, it was Netanyahu's legal troubles and his desire to battle the Attorney General's indictments with a renewed mandate from the public, that led the country to elections.

From the outset of their campaigns, Benny Gantz and his now former colleagues in Blue and White made safeguarding the independence of Israel's judiciary a central part of their platform. This was seen as a reasonable demand, as a sitting prime minister has never before been under indictment in Israel and the prospect of such a reality seemed unfathomable, even to many Netanyahu supporters on the right.

Blue and White also understood that as a prime minister on trial, Netanyahu was likely to join forces with the more conservative factions of his coalition who had long called for measures to "rein in" the judiciary. If these forces had garnered enough votes in the Knesset, they planned on passing a draconian version of the “override clause” that would have allowed the Knesset to circumvent court rulings.

When the third round of elections in March resulted in deadlock and the threat of a fourth visit to the polls was looming over the Israeli public, Gantz decided to join a government with Netanyahu despite vehement objections from other Blue and White members Yair Lapid and Moshe “Bogie” Yaalon. In justifying this about-face, Gantz pledged that his party – with Avi Nissenkorn serving as Justice Minister – would ensure that Netanyahu's trial would proceed with no impediments, and that the government would voice a message of trust in the judicial system. 

Technically, Gantz has so far lived up to this pledge. After an initial delay at the beginning of the corona crisis when almost all court hearings were suspended, Netanyahu's trial began as scheduled on May 24, exactly one week after the new government was sworn in. Then, when Netanyahu and some of his allies openly questioned the validity of the trial and personally criticized the police officers and professional prosecutors who investigated and indicted him, both Gantz and Nissenkorn strongly voiced their support for the police and the legal system.

Nevertheless, Gantz's promise to safeguard the judiciary, and the prospects for the future, do not look as certain. Minutes before his trial began, Netanyahu publicly lashed out at the police and prosecutors, bluntly voicing criticism that he had only hinted at in the past. Meanwhile, both prior to the trial's opening and in the weeks since then, Netanyahu's allies in the Likud and the media have spread unfounded rumors and conspiracy theories against Attorney General Avichai Mandelblit and others. It is this exact possibility that troubled so many when the idea of Netanyahu heading to a cabinet meeting in the morning and then to the courtroom in the afternoon was first raised. What perhaps is most troubling is that for most Israelis this has now become an accepted norm. 

It is hard to see how as this trial proceeds, the discourse will not get worse, placing Likud and Blue and White in adversarial positions and raising the legitimate question of how long this partnership can last.

Economic Uncertainty

If Netanyahu's legal troubles did not exist, the economic crisis plaguing Israel – and the world – would be at the top of the agenda for this new government. The lockdowns imposed to stem the spread of Covid-19 had a devastating effect. In the beginning of March, unemployment stood at only 3.6 percent, among the lowest rates ever recorded in Israel's history. By the peak of the crisis it had skyrocketed to 27 percent of the workforce – including both those fully unemployed and those placed on unpaid leave. Even as Israel emerges from the shutdown, the more optimistic estimate of IDI's experts is that, if we do not experience the dreaded second wave of corona, then perhaps the number of unemployed will drop to 9.5 percent by the end of the year. This economic reality was a major driver in bringing the Likud and Blue and White together to form the government. In fact, their coalition agreement stipulates that legislation during the first six months of the government address only the health crisis and the economic and socioeconomic fallout that resulted. 

The first test of this agreement will be the 2020-2021 budget that must be passed by August 25. Amid political uncertainty, Israel has been operating on 1/12 of its 2018 budget. This has limited the government's capacity to put in place robust fiscal and economic measures to deal aggressively with this situation. Now that the government is in place, it must quickly catch up and even prepare for a deterioration of the situation should a second wave emerge.

While the scope of the corona crisis is not unique to Israel, the makeup of the unity government creates additional challenges. With Netanyahu as premier, Yisrael Katz from the Likud as Finance Minister, and Labor's Amir Peretz and Itzik Shmuli as Economic and Social Welfare ministers respectively, it mixes almost Thatcherite economic adherents with the last vestiges of Israel social-democratic party, a combination that already erupted into tensions when stimulus packages were brought to a vote in the cabinet. On the other hand, the broad parliamentary base this government enjoys – 73 out of the Knesset's 120 seats – ensures that if and when agreements are reached in the cabinet, they are likely to pass the full Knesset with relative ease.

Annexation Unknowns

The final challenge to this new government is one of its own making. As part of the election campaigns, Netanyahu continuously promised his right-wing base that if reelected he would extend Israeli sovereignty to the Jewish settlements in the West Bank. While some argued that this would be tantamount to annexation, Netanyahu and his supporters insisted that it would right an historic wrong and serve as an important step towards finally drawing up Israel's eastern border. What started as a campaign pledge turned into a central component of U.S. President Donald Trump's peace plan and then became the only clause in the coalition agreement allowing Netanyahu's Likud to move forward with needed legislation, without the possibility of a Blue and White veto.

Both the plan itself and the geopolitical consequence of such a radical departure from Israeli and American policy over the past 43 years, are unclear. The exact scope of the annexation (what percentage of the land), how many Jewish communities will become enclaves surrounded by a future Palestinian entity, and the status of Palestinians in these areas are all undecided.  Moreover, even if the U.S. backs this move, Israel may very well see diplomatic sanctions from Europe, a blow to ties with Jordan and other moderate Arab states, and perhaps even a violent third Intifada by Palestinians who have already cut off all security coordination with their counterparts in the Israel Defense Forces, to protest the plan.

This is not to say that annexation is a done deal. While half the Israeli public supports extending Israeli sovereignty (25 percent support doing so even without American backing), many experts believe the public lacks a clear understanding of all aspects of the plan. This is also why, perhaps surprisingly, Netanyahu is receiving pushback from the right flank of the settler movement who fear that accepting the Trump plan means accepting that a significant number of settlements will remain isolated from the rest of the country. Even more worrying from their point of view, is that if the Netanyahu government accepts the Trump plan in its entirety, it would be agreeing in principle to the eventual establishment of a Palestinian state. Such a policy position is anathema to most Likud politicians, and of course to the settlers themselves.  

In addition, it is still unclear what role Gantz and his partner Gabi Ashkenazi will play vis a vis annexation. The coalition agreement denies them veto power to stop Netanyahu, but it also states that the government will honor the need for "maintaining regional stability, maintaining peace agreements, and striving for future peace agreements." As Defense and Foreign ministers, and as former IDF chiefs of staff, Gantz and Ashkenazi are uniquely positioned to warn the cabinet about the dangers posed by annexing disputed territory. 

Both Gantz and Ashkenazi have also met regularly with U.S. Ambassador David Friedman and each met with US Secretary of State Mike Pompeo when he visited Israel last month. It is safe to assume that they discussed the issue of annexation. However, it is not clear, what other types of contact exist at this point between Gantz and the U.S. administration.  It may very well be that he is warning them of the fallout of too rash a move.  This could be a way to ensure that the final proposal brought to a vote be something that might be tolerable enough to Blue and White not to cause a major coalition crisis.

Political Ramifications

While new elections do not (thankfully) seem to be on the horizon at this point, there is no doubting that the landscape has significantly shifted in the short time since the 2019-2020 political deadlock was supposedly resolved. Thanks to the combination of the corona crisis, which enabled him to display leadership many Israelis believe has saved lives, along with the annexation plan that is to the liking of significant portions of his base, Netanyahu is in a position better than in perhaps two years. Though the prospect of another election is not popular among Israelis (especially Jewish Israelis), recent polls show the Likud garnering  as much as 40 seats if an election were held right now. More importantly, the split in Blue and White has left no political party in anywhere near a position to threaten the Likud's dominance.

Benny Gantz, by contrast, is weaker politically than at any point since he entered politics in December 2018. Polls show Blue and White barely making it into double digits, and almost half of Israelis doubt that the rotation deal will actually take place in November 2021, making Gantz a source of almost daily mockery. Many assume that Netanyahu, rather than give up his seat, will find some loophole that allows him to push for early elections at an opportune time for his political fortunes.    

Conclusion

The challenges facing this government are daunting, and its prospects for success at promoting any meaningful policies – or even surviving through a significant part of its term – seem dim. Nevertheless, this does not mean that those who care about Israel's future should sit back and bemoan the state of its politics. Despite its many flaws, this coalition, with its wide base of support in the Knesset, can still solidify Israel's democratic institutions and put in place policies that will, at the very least, safeguard the rights of its citizens and provide the prospects of better days ahead. 

The question remains if the leaders at the head of the government will be able to overcome their differences, avoid temptations to seek short-term political achievements, and seize the moment to provided much-needed relief and sustenance for Israel's citizens.