PM expected to authorize gas deal following Deri's resignation from Economy Ministry

Netanyahu says gas deal will bring Israel energy independence, more jobs, lower cost of living.

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November 1, 2015 12:45
Netanyahu

Prime Minister Benjamin Netanyahu adressing cabinet.. (photo credit: EMIL SALMAN/POOL)

 
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Prime Minister Benjamin Netanyahu is expected to use his new authority as economy minister to authorize the government’s gas deal in the coming days after Shas chairman Arye Deri resigned from the position on Sunday.

“Today, we are taking a major step to promote the supply of gas to Israel. Gas is Israel’s No. 1 engine for growth in the coming years,” Netanyahu said at the opening of the weekly cabinet meeting Sunday.

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The gas deal will bring in investment of billions of dollars in the next two years and create related industries and jobs. The cost of energy and the cost of living will be lowered, he said.

“This will also bring Israel energy independence. We will not be dependent on foreign sources of energy, which is very important to Israel,” the prime minister added.

“This will bring in hundreds of billions of shekels over the next 20 years for the citizens of Israel, to the welfare, education and health budgets. This is very important to the country.”

As for the political debates surrounding the gas industry structure outline, Netanyahu expressed confidence that “in a year or two or three everyone will understand this was a necessary step. I promised to pass the outline, and today we are taking the most significant step in order to do it.”

Deri’s resignation from the Economy Ministry will take effect on Tuesday. He will retain the Negev and Galilee portfolio, which will be expanded to include authority over the “social periphery,” meaning more than 200 very poor neighborhoods throughout the country.



Likud officials confirmed a Channel 2 report that, in return for giving up the Economy Ministry, Netanyahu wants Deri to be compensated with the majority of the Welfare and Social Services portfolio and current Welfare Minister Haim Katz to be promoted to economy minister.

According to the plan, some of the Economy portfolio would be removed from the ministry and given to Deri.

Netanyahu is expected to meet with Katz on Monday to finalize details.

“Deri will be given fair compensation for a minister of his stature,” the prime minister said.

A source close to Deri said the Shas chairman will not accept an expansion of the relatively small Negev and Galilee Ministry alone, and expects to receive an additional, more senior portfolio.

The source said he did not know about the Welfare idea.

Katz’s associates said he also was unaware of the idea and that he intended to fight to keep authority over the issues he cared most about.

Deri’s resignation allows the gas outline, which was approved by the cabinet in July, to be implemented because Deri had refused to invoke Article 52 of the 1988 Restrictive Trade Practices Law (the Antitrust Law), which permits an economy minister to circumvent the objections of an antitrust commissioner in matters of foreign relations or national security, and the coalition could not get a majority in the Knesset to allow Deri’s authority on the matter to be transferred to the cabinet.

Netanyahu, with his new authority over the Economy Ministry, plans to invoke Article 52.

Deri said he tendered his resignation because there was no other way to push the gas outline forward.

“I had no choice but to resign because the country must go ahead with the gas outline. The outline, which I worked to improve, is the lesser evil and the country needs the billions of shekels the gas will bring in,” he said.

“I promise to continue working in the government and everywhere else non-stop and uncompromisingly for the nation and the country and mainly for the weaker sectors – in the Negev and the Galilee, in poor neighborhoods and the periphery.”

The budget for Deri’s Development of the Negev and Galilee Ministry will triple from NIS 150 million to NIS 450m.

National Infrastructure, Energy and Water Minister Yuval Steinitz thanked both Netanyahu and Deri for formulating a solution that will finally lead to the implementation of the gas outline, following previous approvals of the plan by both the cabinet and the Knesset.

“The entry of the outline into force will lead to the development of the Leviathan, Karish and Tanin fields; to hundreds of billions of shekels of future income for the benefit of Israeli citizens; and an increase in energy security for the State of Israel,” Steinitz said.

The energy minister was referring to Israel’s largest discovered natural gas reservoir, the 621-billion- cubic-meter Leviathan, as well as smaller basins Karish and Tanin – which have yet to be developed.

While, according to the gas outline, the Delek Group and Noble Energy will be able to remain in the Leviathan reservoir, the two companies will have to sell their shares of Karish and Tanin within 14 months of the outline’s official launch. Within six years, Delek Group also will have to sell its share of the 282-b.cu.m.

Tamar reservoir – which has been online since 2013 – while Noble Energy will have to dilute its assets there but can remain the basin’s operator.

The government’s plan for the sector will “serve as an engine for increasing investments and enhancing economic growth in Israel for years to come,” Steinitz added.

Bayit Yehudi opposed expanding the Negev and Galilee Ministry at first, due to concerns that Deri’s “social periphery” role would cut into Education Minister Naftali Bennett’s authority, but the cabinet agreed that would not happen.

“The children in Israel are not toys that can be shifted from one ministry to another,” Bennett said. “The responsibility for children belongs solely to the Education Ministry. I will not let principals in Beersheba or Shlomi have to go to seven ministries in order to initiate a class. This will not happen.”

In addition, a committee led by Prime Minister’s Office director-general Eli Groner will make a recommendation within the next 45 days as to whether the Economy Minister’s authority over daycare for children ages 0-3 should be transferred to the Education Ministry.

Bennett’s threat to oppose expanding Deri’s ministry was seen in the Likud as revenge for Netanyahu proposing to give Bayit Yehudi’s portfolios to Yesh Atid in an effort to get the latter party to join the government.

Yesh Atid chairman Yair Lapid revealed on Saturday that his party also was offered the Foreign Ministry by Netanyahu but that it turned down the offer.

Yesh Atid announced that it would add the Economy Ministry to its petition to the High Court of Justice against the multiple ministries Netanyahu is holding. The court is expected to deliberate on the matter on November 10 when Netanyahu will be in Washington. The party asked Attorney-General Yehuda Weinstein to freeze the appointment until then.

Netanyahu, in addition to being prime minister, currently holds the Foreign Affairs, Communications and Regional Cooperation portfolios.

Knesset Economics Committee chairman Eitan Cabel (Zionist Union) accused Netanyahu of bribing Deri in order to pass the gas plan.

He called on Weinstein to open a criminal investigation against them or to stop the process immediately.

If Weinstein does not take action, Cabel said he would petition the High Court.

“This is not just a stinking maneuver, it is bribery between two elected officials. Deri is giving the prime minister the economy portfolio and the ability to invoke article 52 in exchange for funds, about which they are negotiating,” said Cabel, who intends to use his committee to stall the gas deal’s approval.

MK Shelly Yacimovich (Zionist Union), one of the gas deal’s most vocal critics, said Deri’s resignation is “authorizing a private monopoly and giving great power to [gas investors Delek owner Isaac] Tshuva and Noble Energy... in an irrational and shady deal.

“It is as clear as day that something is rotten here,” she said. “All of its supporters, vocal or silent, should prepare their alibis, because we are not far from the day that they will be brought to justice for what they have done.”

On Wednesday, the Knesset is expected to vote on the formation of a Parliamentary Commission of Inquiry about “Deri and Netanyahu’s shady gas deal,” initiated by MK Esawi Frej (Meretz).

Sharon Udasin contributed to this report.

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