Early election rumors in full swing as budget deadline approaches

Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz met Tuesday to discuss whether to try to pass an unpopular proposed budget or resort to calling early national elections, adding to speculation that Israelis could be going to the polls within months.

Netanyahu is scheduled to meet later this week with leaders of the various coalition parties in order to gauge support for a 2013 budget that includes sweeping austerity measures.

However, Shas head Eli Yishai said Tuesday that although the religious party does not favor early elections, Shas would not vote in favor of a budget that would be “another blow to the middle-class and poor.”

“Israel does not need elections now, which can happen on their regular schedule,” Yishai said. “As the only social justice party, Shas is not allowed… to vote for harming the disabled, workers in the public sector, the elderly and single mothers.”

Observers have suggested that with the budget deadline approaching, and with resistance to the budget from at least some coalition parties, Netanyahu will choose instead to disband the government and call elections.

Early elections could be called for February or March 2013, and some coalition parties are already reportedly planning for that possibility. Elections are currently scheduled to be held only a year from now. At the weekend, Yisrael Beteynu party leader Avigdor Liberman, the foreign minister, said it would become clear fairly soon whether elections will be held in the spring, or as scheduled in the autumn.

On Monday, Haaretz speculated that a proposed 2013 budget would likely fail to gain a majority in the Knesset due to the limited amount of time remaining for MKs to deliberate before a budget must be pushed through. The paper reported that Netanyahu is widely expected to follow through with suggestions in recent weeks that he would hold early elections should the budget fail to pass.

A budget must be submitted by November 1, at which point the Knesset has two months to pass it.

Channel 2 reported on Sunday that the prime minister will put forward a motion to dissolve the Knesset when parliament reconvenes after the Sukkot holiday on October 15.

Sources close to Netanyahu, however, said that the prime minister is aiming to avoid early elections at all costs, Channel 10 reported on Monday. And last week Israeli business site Calcalist reported that sources in the Prime Minister’s Office and Finance Ministry said the budget would likely be put before the Knesset next week and that the elections would not be moved up.

In interviews with the Israeli press over the weekend, Netanyahu said that he had yet to decide whether to hold early elections and that he was trying to gain support for the proposed budget.

In July, the cabinet passed a series of tax hikes and a plan to cut funding to all ministries except the ministries of defense, welfare and education. The motion was touted by Netanyahu and Steinitz as necessary to close the budget deficit while providing funding for new social programs, but it proved widely unpopular and some of the planned hikes were eventually withdrawn.

In May, Netanyahu prevented the expected dissolution of the Knesset and the scheduling of early elections by forming a last-minute national unity government with Shaul Mofaz’s Kadima party. But the short-lived coalition broke apart in July when the Likud refused to accept Kadima’s proposals for drafting ultra-Orthodox Israelis into the military.

Opinion polls consistently point to another Netanyahu victory if elections are held in the near future, with his Likud party set to slightly increase its Knesset representation from its current 27 seats. The Labor Party (13 seats in the 2009 elections) is set to gain ground, most polls, show, with Kadima (28 seats in 2009) heading for a drastic fall.

In a discussion among political analysts on Army Radio on Tuesday morning, the consensus was that Netanyahu would be returned as prime minister, though possibly with a slightly different coalition. It was noted that Shelly Yachimovich, the Labor leader, has not ruled out joining a Netanyahu-led coalition despite their differences on how to tackle Israeli-Palestinian relations, provided she would have a central role in socioeconomic policy. And neither has new would-be political player Yair Lapid, an ex-TV news presenter and son of former minister Yosef Lapid, whose Yesh Atid party will be running in elections for the first time.

Another potentially relevant political player, the analysts noted, is former Shas party chairman and minister Aryeh Deri, who has said he wants to return to politics having served jail time for fraud and other offenses. If Deri sets up a new party, he might draw votes away from Shas, and might be more inclined than Shas to join a centrist, Labor-led coalition, the analysts said. But they also noted that Deri is rebuilding his relationship with Shas’s spiritual leader, Rabbi Ovadya Yosef, and might return to politics with Shas.

Analyst Raviv Drucker said in the discussion that former Kadima leader Tzipi Livni was being wooed by Yachimovich as a possible Labor number two, and that internal polls suggested this might boost Labor’s Knesset standing. But he noted that Livni has made no decision on a return to politics, having lost the Kadima leadership to Mofaz earlier this year.

Raphael Ahren contributed to this report.