Netanyahu Aggressively Going for Broke

by Emanuel Shahaf 

Looking at the recent actions of the government of Israel, one cannot but conclude that it is hell-bent on ruining the country. After having forcefully pursued legislation that attempts to change the system of governance from liberal democracy to an illiberal one and getting caught out on this effort by the public, the government hasn’t given up even though hundreds of thousands of citizens, possibly millions, have been hitting the streets in massive protests that have been going on for more than 33 weeks.

Meanwhile, the Israeli Shekel has tanked against the US Dollar, the TA stock market is underperforming considerably compared to the NYSE, investment in Israeli high tech has dropped by 68% (1^st quarter 2023), international rating agencies are putting dire warnings in their reports and there’s almost no economist of consequence in Israel, including the present and former governors of the Bank of Israel, who hasn’t publicly expressed deep concern about the government’s legislative plans and their potentially negative impact on the economy.

If this isn’t enough, the government has fought the defense establishment over the latter’s policy not to confront conscientious objectors to reserve duty, who are increasing in all branches of the IDF and other defense institutions, in protest over the government’s planned legislation. As a result, the operational readiness of critical units, particularly in the Air Force, has been affected to a degree that has not yet been detailed in public but deeply concerns Air Force Commander Tomer Bar and IDF Chief of Staff Herzi Halevi. Despite the gravity of the situation, their public warnings of its development were cold-shouldered by PM Netanyahu and the government, even though the PM is the only one who can conceivably mitigate the situation by calling off all governance-changing legislative efforts.

As it appears now, the Prime Minister, supported by the government, with the possible exception of the Minister of Defense, who is torn between his loyalty to the IDF and a troublesome cabinet, intends to maintain his aggressive stance at least until the Israel Supreme Court has ruled on the fate of two pieces of legislation that the government coalition has passed recently. The first one is the cancellation of the reasonableness clause, which, if passed,  is potentially a major limitation to judicial oversight over decisions of the executive branch. The Supreme Court will decide it on September 12th. The second is the law regarding the terms for removal of the PM from office, which will be adjudicated later in September. Both laws are critical for Netanyahu and the viability of his government.

It remains to be seen to what extent the Prime Minister and his governing coalition will continue to cause harm to Israel’s social cohesiveness and its economy. The Ultraorthodox parties in the coalition are pushing their own highly divisive legislative agenda calling for total exemption from military service but are loath to add even more fuel to the ongoing protests that could even bring down the government.  The same parties may eventually jump ship when they realize that the potential damage of the legal reform legislation is too great and they won’t benefit from supporting it. Either way, the situation is inherently unstable and, even more so, unpredictable and will likely remain so for months to come. Contributing to the rather precarious situation is the refusal of the PM and government ministers to clarify if they’ll abide by the Supreme Court’s decision.  This is particularly problematic at a time there are tangible threats of war on the border with Lebanon, and the IDF’s readiness continues to deteriorate by the week.

The author, Emanuel Shahaf  served in the Prime Minister’s Office as a member of the intelligence community, is Vice Chairman of the Israel-Indonesia Chamber of Commerce, Vice-Chairman of the Israeli-German Society (IDG), Co-Chair of the Federation Movement (www.federation.org.il), member of the council at israelimovement.co.il and author of “Identity: The Quest for Israel’s Future”