For Yair Lapid, it has not been the smoothest of introductions to politics. He entered the Knesset 15 months ago at the head of a list of 19 first-timers, mandated to bring to the legislature new dynamism, transparency and genuine representation of the interests of the people — or at least the interests of those middle-class, middle-view Israelis who had voted for him.

After weeks of coalition negotiations, he then entered the government in the anticipatedly thankless task of finance minister — a job for which he had no particular training, and one in which, at first at least, he looked somewhat out of his depth, not least when inventing a fictional “middle Israeli” character, Ricki Cohen, who, had she existed, would actually be considerably better off than the demographic whose cause he is ostensibly championing.

Of late, though, Lapid plainly feels that he is back in the ascendant. He has been able to push through key elements of his campaign agenda, notably including electoral reform and, centrally, legislation to gradually increase the number of young Orthodox males serving in the Israel Defense Forces and the work force. While many others carp at the specifics of the new draft law — the ultra-Orthodox vow to resist it and are outraged by its criminal penalties; critics argue that it does not go far enough — Lapid is delighted by its terms and, in this interview with The Times of Israel, was adamant that it is already having the desired effect.

We spoke in his office at the Finance Ministry in Jerusalem even as Fatah and Hamas were putting pen to rapidly drafted paper on their reconciliation agreement, a development that plainly blindsided Lapid and his ministerial colleagues, and one that has presented new challenges to the leader of a Yesh Atid party widely regarded as centrist. A day later, Lapid and fellow relatively dovish Hatnua party leader Tzipi Livni voted along with their harder line colleagues in favor of the unanimous inner cabinet decision to suspend negotiations with Mahmoud Abbas because of the PA president’s partnership with the terrorist Hamas. To judge by Lapid’s comments in this interview, and the profound misgivings he expresses about Palestinian intentions, he is not likely to heed opposition Labor Party leader Isaac Herzog’s plea and bolt the coalition over the issue any time soon. In the who-destroyed-the-peace-process blame game, Yair Lapid’s finger is certainly not pointing at Prime Minister Benjamin Netanyahu.

Finance Minister Yair Lapid with Prime Minister Benjamin Netanyahu during a press conference in July 2013. (Photo credit: Flash90)

Finance Minister Yair Lapid with Prime Minister Benjamin Netanyahu during a press conference in July 2013. (Photo credit: Flash90)

The Times of Israel: Your father was in politics. You knew this world. It wasn’t alien to you. You came into this world with the desire to be different. You brought in a list of 19 first-timers, some of them wonderful people, who’d never been in the Knesset before. But it’s not been smooth at all. Lots of people would say you’ve done really badly. Is it worse than you thought it would be?

Yair Lapid: It’s not as hard as one might expect. In order to be different, you first have to understand: different from what? It took us some time. There was a learning curve. Of course, mistakes were made.

Change is something everybody likes in theory and hates in practice. We were and we still are fighting against very strong forces. When we were tackling the inequality of the burden [by which the ultra-Orthodox do not serve in the army], it was a battle against religious groups. When we were changing the electoral system [raising the electoral threshold, reducing the number of cabinet ministers, and making it harder to topple a government mid-term], it was a battle against very powerful political forces. Now I spend at least half of my time on housing, reducing prices, and fighting against very strong economic interest groups. It’s a constant fight. But I’m not complaining. I have a better life now than I had a year ago.

What does that mean?

It’s more meaningful now.

Because…?

‘Someone just asked me, are we paying for your training? I said, well, maybe a bit’

Because I know how to change things. It takes a certain amount of know-how in order to bring to the government a whole big new plan to help Holocaust survivors with an additional 1 billion shekels ($280 million) a year. Now I know how to manage it, budget it, take this money out of other things that are not as urgent or necessary. All these other budgetary demands are important, but the Holocaust survivors are dying and these are the last 3, 4, 5 years that we have to support them.

Now, when I want to shape the priorities, I know how to do it.

You mean you’ve learned the ropes?

The first year is always hard. Someone just asked me, are we paying for your training? I said, well, maybe a bit, but the alternative is never having new people. This is the price of democracy.

What are the mistakes? If you’d known a year ago what you know now… what might you have done differently?

A housing construction site in Jerusalem, October 27, 2013. (photo credit: Yonatan Sindel/Flash90)

A housing construction site in Jerusalem, October 27, 2013. (photo credit: Yonatan Sindel/Flash90)

The biggest mistake I made was in what is supposed to be my field of expertise — media and communicating what I’m doing. I’ll give you an example. During the campaign, I went to 256 different places and gave 256 identical lectures. And then I had Q and A, which was always more interesting. One of the things I said 256 times was that when you look at the housing situation and you want to know what’s wrong with it, look at what is called vetek b’nisuim — seniority in marriage. This is a rule created by the former Shas minister of housing, Ariel Attias, which says that you get more housing benefits the longer you’ve been married. Now, this was tailored, of course, to young ultra-Orthodox couples, who marry very young because they don’t have to go to the army. I cited this as an example of one of the many ways that the young ultra-Orthodox benefit even more from not serving in the army. I said, we have to cancel that seniority in marriage benefit.

Now, you’re quite well informed. But you haven’t heard a word about this in the past year. You know why? Because I cancelled this criterion two weeks after taking office, but I wasn’t aware that I needed to make a big fuss about that in the same way that I had during the campaign. This is a lesson I learned the hard way.

Let’s come back to more of the specifics of your job as finance minister in a minute. Let’s talk first about the Palestinian diplomatic-security issue and the coalition’s capability to grapple with it. You’re in a coalition with no majority for the centrist positions that you would take on the peace process.

Ehud Barak, left, with Bill Clinton and Yasser Arafat (photo credit: Sharon Farmer)

Ehud Barak, left, with Bill Clinton and Yasser Arafat (photo credit: Sharon Farmer)

This government has a majority for the peace process and even for a peace agreement, including the evacuation of settlements and a withdrawal of Israel from some of the territories. I heard the prime minister say this, although not in those very words, on the first day of this government: this government is going to work towards a peace agreement under the principle of two states for two peoples. I’m not sure you can blame the way this government is constructed (for the failure to reach a deal). I remember Ehud Barak’s government failing in 2000 and then Ehud Olmert’s government failing in 2008. These are examples of very fair agreements that were offered to the Palestinians. If this is a blame game, I’m not blaming us now. The majority of the obstacles are placed by the Palestinians.

It’s hard to believe looking at the numbers that there would be a majority in the coalition for a deal. Jewish Home and the majority of the Likud would not support it.

There’s a clear majority among Israelis for a separation agreement — I’m not calling it a peace agreement — with the Palestinians. Most Israelis think this is something that must happen both for security reasons and because we want to keep the Jewish identity of this country. Therefore, if a deal to this effect went to the Knesset, the opposition would support it and there’d be a big majority. If it went to a referendum, there’d be a majority. If there was an election over it, there’d be a majority for an agreement that fully protects the security interests of Israel.

Even if you accept that the Palestinians put up a lot of obstacles, is there more that Israel could have done, that someone from your place on the spectrum would have wanted to do? For example, would you not have wanted the government to come out and say that we’re not building in areas that we don’t intend to retain?

Yes, very much so and this will be on the table if there’ll be another round of talks… It probably wouldn’t involve stopping building that is already started, but probably there’d be no new buildings. I would have liked that better than releasing any prisoners. But I’m part of the coalition and I think this is the preferable coalition for having a peace agreement because in the eyes of the public it is more reliable, if we can get a deal. This thing has been tried from left and from right and from center, and the only thing we can do is keep on trying.

Maybe the whole approach is wrong. Maybe there needs to be much more emphasis on bottom up, on creating a climate conducive to a deal. I think Israel in the last generation realized that the numbers are not good. That if we want a Jewish, democratic Israel, we need to find a way to separate. I don’t see a parallel sense of urgency on the Palestinian side. Politicians are influenced by the public. Abbas’s public is not saying to him, please do the deal.

Well, there is a question that is haunting me which is whether the Palestinians really want to have their own state. I’m not sure about it. In some ways maybe we will really have to twist their arm in order to make them establish the free “Palestine.”

You’re not sure they want a state. So, what do they want?

There’s something convenient to being the eternal victim. With the creation of a country, and we know this better than most nations, the ceremony in the UN is nice, singing the national anthem for the first time is fantastic. But then reality kicks in and you have to build your own electricity company and collect taxes and build houses and roads and fight corruption and fight terrorism and all those agonizing things that countries do. And sometimes you look at the Palestinians and you wonder whether or not they have it in them. I hope they do and I think we should push them towards this.

I can see that in the Arafat era there was an obvious concern, that here’s a revolutionary who didn’t want to make that transition to statesman. But today? I’m sure they want a state. Isn’t the question, really, whether they want the state at the price of genuinely coming to terms with Israel?

The Palestinians are the first nation in history that are treating independence as a zero sum game. They say either you give us 100 percent of what we want or we don’t want it at all. The United States was established as a shaky confederation of 13 states. I read the other day that modern Italy was formed without Rome. I didn’t know that. Look at the UN Resolution about the establishment of Israel. Fifty-five percent of the territory, without the Wailing Wall, without big chunks of Jerusalem. But we acted according to the basic principles of nations that really want independence. We said, whatever they give us we’re gonna take, and then we’re going to struggle over the details. This is what nations really do when they really want to go there.

‘I don’t need recognition from Abbas for this to be a Jewish state’

But the Palestinians are saying: They’ve only offered us 94 percent of what we want territorially. We’re not going to take it. They’ve only offered us 94 percent of the self-government that we’ve asked for. We’re not going to take it. It’s either 100 percent or we’re not taking it at all.

You look at this and you ask yourself, maybe they don’t want it so much. To me it’s an agonizing thought because I don’t care whether or not it’s good for the Palestinians to have a free Palestinian state, but I think it’s a good idea for the Israelis. It allows us to separate from them completely. Unlike the Israeli right, I don’t think this is a fight between our god and theirs. Unlike the Israeli left, I don’t want a lower wall. I want a higher wall. The two pillars of Yesh Atid are security and Jewish identity.

Do you care if they call us a Jewish state?

The demand is really that they show some seriousness, that the agreement is truly the end of the conflict. So I understand the logic behind it. But I don’t need recognition from Abu Mazen [Abbas] for this to be a Jewish state. The basic idea of Israel, the Zionist idea — and I’m a devoted Zionist — is that you want to create a state and say to the people, to all the gentiles in the world, that we don’t care anymore whether you recognize us or not. We’re gonna recognize ourselves. This is why my father came here and didn’t go to New York.

Coming back to the prisoner issue, it always seemed to me the worst of the options. Obviously we were negotiating on the basis of the ’67 lines, whether we like it or not, and you can freeze and unfreeze the settlements. It’s not irreversible. Whereas letting these people go… And what does it say about Abbas, that he wanted these people out at the beginning of a process, rather than at the end, as the last act when the deal is being signed. So why did the government do it, and did you try to resist it?

There was a huge argument within the security cabinet. Let me remind you, at the time we had a problem of not being able even to jumpstart the whole process. This was a way of starting the process. This government was established after more than a year of no negotiations at all.

There was no way to get the talks going otherwise? A settlement freeze would not have been enough?

Not with this combination of the kind of coalition we have and the kind of Palestinians we have. If it were up to me, I would go with the freeze every day of the week, because it’s reversible. Because the settlements outside the blocs take an unfair toll from us all economically, socially.

Israeli Finance Minister Yair Lapid, right, with Palestinian counterpart Shukri Bishara in Jerusalem, June 16, 2013 (photo credit: Anat Hamami/Finance Ministry)

Israeli Finance Minister Yair Lapid, right, with Palestinian counterpart Shukri Bishara in Jerusalem, June 16, 2013 (photo credit: Anat Hamami/Finance Ministry)

How much time have you personally spent on the peace process? How often have you met with Abbas in the last year?

I didn’t meet with Abbas. I don’t meet with Palestinian leaders, because Israel has a negotiating team and it would be interfering. I do meet regularly with Shukri Bishara, the Palestinian Minister of Finance.

Are your dealings with your Palestinian counterpart encouraging?

They are encouraging in terms of the atmosphere. They are not as encouraging in terms of their ability and willingness to establish, build and run a state.

Give me some examples.

Tell me this: How come the Palestinians always refuse?

I’ve tried to convince them, for example, to establish their own electricity company. For a time, Israel was against this because it was seen as some kind of symbol of government. I spoke with Energy Minister Silvan Shalom and [Netanyahu’s aide and negotiator] Yitzhak Molcho and then I spoke with the prime minister. I said, You know it’s about time they had their own electricity company. We have no way of collecting the debts they owe the Israeli electricity company. Finally everybody said yes.

How much do they owe Israel?

More than a billion shekels (some $285 million) and there’s another 80 million shekels ($22 million) a month added to the debt.

We can offset the money from the taxes we collect on their behalf, but this is not simple. So I got all the authorizations and I happily announced that now we can start. [The Palestinians] looked at me and said, you know, we’re not sure we know how to do this.

It sounds so patronizing what you’re saying: that here are the Israelis saying, as the talks grind to a halt, that we’re not even sure that they really want this state. It may be what you’re finding on the ground, but…

You know what? I’m just telling you things that I’m finding.

Yet they’re telling the world that all they want is a state, and Israel won’t let them have it.

Tell me this. How come they always refuse? How come they refused what was offered to them at Camp David in 2000? By Clinton and Ehud Barak.

Because they were offered 92-93 percent and they wanted 100 percent, and mainly because Arafat was not prepared to legitimize a Jewish state.

Then-prime minister Ehud Olmert and Palestinian Authority President Mahmoud Abbas in Jerusalem, Novermber 2008. (photo credit: Moshe Milner GPO/Flash90)

Then-prime minister Ehud Olmert and Palestinian Authority President Mahmoud Abbas in Jerusalem, Novermber 2008. (photo credit: Moshe Milner GPO/Flash90)

Okay, not Arafat. In September 2008, Abu Mazen is at Ehud Olmert’s home. Olmert opens a map [offering the Palestinians virtually the entire West Bank]. He says, all I want is your initials. And Abbas says, I’ll come back to you, and he never does.

Yes, I would personally say that’s a big barometer moment. But if I’m playing devil’s advocate in a conversation with you, I would say, here’s a lame duck prime minister, who’s finished, giving me an accord that I can’t be sure will be honored. And I’m gonna look like I sold out my people.

This is a lame excuse. He was better off signing with a lame duck prime minister. There is a principle of a continuity of government. Agreements have to be respected from one government to another. He’d have had this fantastic piece of paper, the great map he’d always wanted. You can hold it up and say, You see, the Israeli prime minister signed it, I signed it. You are totally obligated to it. Which Israeli government could say no?

The conclusion that I would draw from that moment is not that the Palestinians don’t want a state, aren’t ready for a state, or aren’t capable of establishing a state. It is rather, that they don’t want to come to terms with Israel.

You could say, well yes, the even less comforting thought is that the Palestinians don’t want to have a state alongside the state of Israel because they have never given up on their original vision which is having a state instead of Israel.

Yes, your argument that says ‘I’m worried they don’t want a state at all’ is actually more comforting than my concern that they just don’t want a state alongside Israel.

Yes, and if this is the case, they just have to know that this will never happen.

But you’re not drawing that terribly bleak conclusion?

I still have my hopes that there’s a future for all of us here together in this very painful part of the world.

Hundreds of thousands gather in Jerusalem on Sunday, March 2, 2014, to protest the emerging draft law (photo credit: Yonatan Sindel/Flash 90)

Hundreds of thousands gather in Jerusalem on Sunday, March 2, 2014, to protest the emerging draft law (photo credit: Yonatan Sindel/Flash 90)

Let’s talk about a few domestic matters. The draft law, is this really going to work?

It is already working. It actually started working last year, because we put quotas: 3,300 [ultra-Orthodox conscripts] in the year 2013, 3,800 in 2014 and so on and so on. It is progressive. In 2013, they surpassed the intended quota. And they are going to surpass the quota for 2014.

The economic sanctions are already having their impact. If somebody gets a draft letter and doesn’t appear, he gets a warning letter and then he gets a fine. And his yeshiva gets a fine. So they’re already coming.

We knew in advance that the minute the bill would be passed, there would be a few months of reluctance: they will not come, they will be angry, there will be demonstrations. That’s okay. Social revolutions are a painful process. Someone asked me about this huge demonstration here in Jerusalem [against the ultra-Orthodox]. I said it was fine — a good, democratic example of freedom of speech. In fact they were praying instead of shouting, which was a nice thing. They were praying for the wrong reason, but still. So, yes, some of them won’t report for the draft… but a substantial proportion will. They know already that this [avoiding the draft] has done them no good.

You think the law is going to work, that it’s great?

Yes, I think we made the right choice. We could have done the symbolic thing, saying everybody by the age of 18 will be drafted immediately, which is what the purists wanted us to do. And I said, let me send you back to the Yesh Atid platform that we published before the elections, where we said we would do it gradually and moderately, and make sure this really works. I don’t need a declarative move. I want a real law that will make the young ultra-Orthodox go to the army and then go to the labor market. Tens of thousands of them are going into the labor market now, which is as important, unbelievable.

On housing, your idea of removing VAT from new houses for young couple — surely the only people who are going to benefit are the builders?

No, we have a whole supervision system. We know how much houses cost in every neighborhood in Israel. The builders won’t be able to hike the prices. We have a governmental system that won’t let them. And the young couples won’t let them.

Isn’t this incredibly old-fashioned, almost communist intervention, rather than the genuine solution of freeing up more land?

I’m far from being a communist. Listen, housing in Israel is different because 93 percent of land is state-owned. The plan is going to work. It’s working already. The market has cooled down.

Finance Minister Yair Lapid delivers a copy of the 2013 budget to President Shimon Peres in Jerusalem, Thursday, May 9, 2013 (photo credit: Yonatan Sindel/Flash90)

Finance Minister Yair Lapid delivers a copy of the 2013 budget to President Shimon Peres in Jerusalem, Thursday, May 9, 2013 (photo credit: Yonatan Sindel/Flash90)

Who is Yesh Atid going to back for president?

We have a party meeting next week to discuss this. So, I have no preference yet.

And the prime minister thing. Do you still want to be prime minister? (Lapid expressed confidence last year that the next elections would see him become prime minister.)

You know, I’ve made so many mistakes. But I make few mistakes twice. Talking about this subject is always a mistake.