With a particularly critical fiscal budget waiting to be passed and coalition
partners being less than cooperative, speculation is increasing that Prime
Minister Binyamin Netanyahu will call for early elections sometime after October
15, when the Knesset reconvenes. Educated estimates forecast that national
elections, currently slated for October 2013, could take place as early as
Critics of the move argue that narrow political interests are
driving the push for early elections. Preventing popular political figures such
as Arye Deri and Ehud Olmert from getting properly organized in time is
supposedly one of the reasons politicians both in the opposition and in the
coalition have united behind the idea to move up elections.
might also wish to avoid making painful – and unpopular – budgetary cuts right
before the elections.
The right-wing coalition headed by Netanyahu that
will most likely be elected again (perhaps with some changes in the coalition
partners) is also said to be interested in holding elections immediately after
the US vote on November 6 to make it easier to stand up to pressure expected
from President Barack Obama – if he gets elected to a second term as polls are
predicting – to move forward with the Palestinian peace process.
addition, Netanyahu is apparently interested in cashing in on his relative
popularity compared to other potential candidates for prime minister.
early elections might actually be in the nation’s interest.
budget will be particularly critical. Fiscal discipline must be maintained while
at the same time ensuring that deep budget cuts do not stifle a fragile local
The Bank of Israel has already downgraded its forecast for 2013
GDP growth from 3.5% to 3% “against a backdrop of a continued global slowdown
and [local] tax increases.”
Lower than expected GDP growth will make it
harder for the government to keep its debt-to-GDP ratio to 3%.
cuts of between NIS 15 billion and NIS 17 billion are likely to have a
significant impact on public sector employees, young families seeking affordable
housing, and large families that rely on government transfers such as child
allowances, among others.
Without early elections, a budget must be
submitted by November 1, at which point the Knesset has two months to pass it.
With Shas and Yisrael Beytenu opposing central aspects of the Finance Ministry’s
budget proposal, it is highly unlikely that the needed cuts can be agreed upon
before this deadline.
Economic concerns such as increased competition and
better, more affordable education and medical care have come to the forefront of
the public’s consciousness after years during which diplomatic and security
issues have dominated political agendas. Only the Iranian threat continues to
vie with economic issues for the voting public’s attention.
circumstances, it makes good sense to hold elections before the budget is
passed. This would enable the public to debate burning economic issues. It would
also give political parties an opportunity to articulate their economic visions.
The government elected after this process takes place would be better positioned
to pass the 2013 budget.
The downside of calling early elections is that
there will be no new fiscal budget prepared for the first months of 2013.
Instead, the 2012 budget will remain in effect without the necessary adjustments
made for population growth and inflation. And none of the pressing economic
issues will be addressed. A proper 2013 budget will probably not be in place
until May or June.
Rushing to pass a budget before November, however,
increases the chances that the government could cave in to populist demands. And
lack of fiscal discipline at such a critical time could have adverse affects,
including the lowering of Israel’s credit rating by Standard and Poor’s, Moody’s
If Netanyahu does indeed decide to call elections in January,
February or March, he should consider one additional move: Doing away with
making election day a holiday.
In the US and other western countries, no
vacation is given to voters.
At a time of global economic stagnation,
Israel can ill afford the more than NIS 1 billion loss to our economy as a
result of making election day a national holiday.
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