In Netanyahu’s Israel, from fiery riots to boardroom bedlam, chaos reigns

A ‘pogrom’ in Huwara and a fake state budget in Jerusalem all tell the same story of a government losing control on all fronts

Haviv Rettig Gur

Haviv Rettig Gur is The Times of Israel's senior analyst.

Burned cars are seen through a broken window in the town of Huwara, near the West Bank city of Nablus, February 27, 2023. (AP Photo/Majdi Mohammed)
Burned cars are seen through a broken window in the town of Huwara, near the West Bank city of Nablus, February 27, 2023. (AP Photo/Majdi Mohammed)

At 4:08 p.m. on Sunday, journalist Yossi Yehoshua tweeted a poster produced by a group of extremist settlers who called for a mass march on the Palestinian town of Huwara, where two young Israelis had been shot and killed by a terrorist a few hours earlier.

The poster laid out the purpose of the march with perfect clarity. In large letters at the top, it read, “We demand victory! We demand revenge! We demand fighting back!”

The march on Huwara was called for 6 p.m., to be followed at 7 by “protests around Nablus, the city of murderers.”

Yehoshua, the military analyst for the Yedioth Aharonoth daily, noted the obvious when he warned that the march would be “a complex security challenge for the IDF.”

Yet what was obvious for Yehoshua two hours before the march was apparently less obvious to the military commanders in the area even two hours after it began.

As night fell and bands of demonstrators entered the town and began to set its homes on fire, the IDF response was shockingly inadequate.

A poster demanding revenge and to fight back for the killings of two Israelis in Huwara, and announcing a march to Huwara and demonstrations around Nablus, issued on February 26, 2023.

Soldiers sent to the village were too few and too surprised by the unfolding events to hold back the Israeli attackers. Surreal scenes ensued of IDF captains and majors rushing to rescue elderly Palestinian women from homes set ablaze by an Israeli mob.

When the dust had settled on Monday, one part of the story became clear: The two cabinet ministers in charge of settlements and law enforcement in the West Bank had disappeared.

Bezalel Smotrich, the government’s “minister in the Defense Ministry in charge of civilian affairs” — i.e., the government official formally in charge of settlements — was almost entirely silent through the night.

He took to Twitter long after the attack was already underway, at 10:25 p.m., but offered no condemnation. Instead, he expressed understanding for the “great pain” caused by the deadly terror attack that morning, called on the mob “not to take the law into your own hands,” and promised that the government would send “a real response to the terror, both military and settlement.”

It didn’t help that a short time earlier, Smotrich had also “liked” a tweet by Samaria Regional Council deputy mayor Davidi Ben Zion that called “to erase the village of Huwara today.”

Itamar Ben Gvir, Israel’s newly christened “minister of national security” in charge of the national police, including in the West Bank, didn’t even have a tweet to share with the public. No statements, no press responses; no one could reach him and no one knew what orders he was giving to police throughout the attack — or if he’d given any at all.

On Monday morning, MK Zvika Fogel from Ben Gvir’s Otzma Yehudit party suggested a reason for Ben Gvir’s remarkable disappearance. The attack on Huwara, he said, had achieved “a deterrent effect unseen since [2002’s Operation] Defensive Shield. I see the result very positively.”

Religious Zionism party leader Bezalel Smotrich, left, and Itamar Ben Gvir of the far-right Otzma Yehudit party at an election campaign tour at the Mahane Yehuda market in Jerusalem on March 19, 2021(Yonatan Sindel/Flash90)

It was a remarkable moment of clarity for the two ministers who’d spent much of the past two months demanding oversight and responsibility for security and law enforcement in the West Bank. When the time came to exercise that power, the sum total of their activity appeared to be the production of a single tweet while a Palestinian town was set ablaze.

It wasn’t until 11:48 p.m. that Prime Minister Benjamin Netanyahu finally seemed to notice the gaping hole in the government’s management of the event. His office put out a statement to reporters that tried, at long last, to broadcast a firm hand on the tiller.

“Prime Minister Netanyahu is convening a security briefing in the wake of the terror attack and the riots throughout Judea and Samaria,” the statement read. It listed the participants in the meeting: Defense Minister Yoav Gallant, the heads of the IDF, Shin Bet and National Security Council, the heads of the IDF’s intelligence and operations directorates, and others.

Two people were pointedly missing from the list. Smotrich and Ben Gvir had slipped out of sight and out of mind.

‘Government Night’

A week earlier and a mental light-year away from the burning West Bank, the Netanyahu government faced a different sort of crisis, less deadly but no less significant to the future well-being of the country. It managed that crisis just as poorly as it did the wave of Palestinian terror attacks or the rampage in Huwara.

Prime Minister Benjamin Netanyahu leads a cabinet meeting at his office in Jerusalem on February 12, 2023. (Amit Shabi/Pool/Flash90)

It can seem jarring to pivot from the life-and-death stakes in the West Bank to the sanitized realm of a cabinet budget debate, but the pivot is important. It illuminates just how far the government’s incapacity stretches.

There is a ritual that takes place every couple of years at the highest levels of the Israeli government, a tightly controlled gathering at which fateful decisions are made about the country’s future. Behind closed doors in the Prime Minister’s Office, dozens of people, including cabinet ministers, their aides and the economists and planners of the Finance Ministry’s Budgets Department, cloister themselves away for 24 hours for a blitz of negotiations that produces the first government draft of the state budget.

It’s called “Government Night,” and it always begins the same way — at 11 a.m. on a Thursday with a presentation by Treasury economists on the big-picture state of the Israeli economy. After the presentation, the Treasury’s budget teams choose different corners in the wood-paneled cabinet conference room and huddle there with their respective minister and senior aides: the healthcare team with the health minister, the education team with the education minister, and so on. Hours of ferocious bargaining ensue in each huddle, and over the next few hours the teams slowly piece together a state budget for the next two years. Things go more quickly for the better-organized ministers who had the foresight to reach a written understanding with the Budgets Department before Government Night; most ministers aren’t that organized.

Meanwhile, in an office down the hall sits the treasury’s “Macro Team,” a kind of internal budgets department for the budgets department. As each issue team negotiates with their respective minister, any concessions are then taken for approval to the Macro Team, whose job is to ensure overall spending doesn’t balloon out of control. Any funds added to one ministry must be pulled from another. It’s a complex and tense give-and-take that lasts through the night.

Then, at 7 or 8 a.m. on Friday, the negotiations are usually concluded. It’s a moment of relief. Veterans of Government Nights remember these moments as festive; cheers and applause always accompany the successful printing of the final budget bill. Then everyone heads home to get some sleep before the Sabbath. The budget bill is then presented to the Knesset the following week to begin the slow process of passing it into law.

Bank of Israel Governor Amir Yaron speaks during a press conference at the Bank of Israel in Jerusalem on January 2, 2022. (Yonatan Sindel/Flash90)

It is almost impossible to exaggerate the importance of Government Night in the proper management of Israel’s fiscal affairs; it is where the rubber hits the road, where ministers’ campaign promises and legacy aspirations run head-first into fiscal realities, where a government’s priorities are clarified in hard shekel terms.

And at last week’s Government Night, the Netanyahu government couldn’t get the job done. For the first time in anyone’s memory, Government Night ended without a budget.

‘A budget for the United States’

At the start of the talks, the Finance Ministry’s chief economist spelled out a looming fiscal crisis: Tax revenues were expected to rise a mere 0.3 percent in the coming year, which translated into a 3.5% decline in real terms given inflation and a weakening shekel. Economy Minister Nir Barkat, a former tech investor, told his fellow ministers that he’d met with “dozens” of tech executives, and “all of them warned of an [economic] avalanche.”

“The economy is in good condition,” said Bank of Israel Governor Amir Yaron, but, he warned, “because of the inflation rate and dangers in the international and domestic environments, we must pass a responsible budget.”

Yet when the negotiations began, minister after minister, each louder than the last, refused to play the game.

Transportation Minister Miri Regev speaks during a test ride on the new Light Rail route between Kiryat Yovel and Hadassah Ein Kerem in Jerusalem, January 16, 2023. (Yonatan Sindel/Flash90)

National Security Minister Ben Gvir, who was promised billions in the coalition agreements that were never going to be given, boycotted the night altogether. So did Environment Minister Idit Silman. Likud’s Tourism Minister Haim Katz stormed out in a rage halfway through. Transportation Minister Miri Regev spent the night railing at the treasury’s refusal to include in the budget bill her demand for immense public transportation subsidies.

The budget teams struggled to keep ministers at the talks. Halfway through the night, the negotiation teams were told to stop trying; the talks were stopped.

In the morning, Netanyahu found himself ensconced in his office with a literal line of ministers outside his door, each waiting their turn to complain or in some cases threaten to resign if they didn’t get their wish.

At around 10:30 a.m., long after the budget bill was supposed to have been approved in the traditional, festive cabinet vote, a worried Netanyahu concluded that the spectacle was causing real harm to the Israeli economy. Ordinary Israelis don’t know about Government Night, but investors follow it closely for signs of any slips in the government’s commitment to fiscal restraint.

Netanyahu gave a simple instruction to the ministers. There would be a vote on a budget bill, and everyone would smile for the cameras and pretend that the negotiations had achieved their goal. The actual text of the bill was irrelevant, it was the look of the thing that mattered. Foreign investors were watching for chaos; Netanyahu was desperate to broadcast order.

And since the content of the bill didn’t matter, ministers could keep anything they wanted in there.

And so a budget bill came up for a vote accompanied by Netanyahu’s one demand: wall-to-wall smiles for the group photo, the one released by the Prime Minister’s Office to calm jittery investors.

The cabinet votes to approve the 2023-2024 budget, in Jerusalem on February 24, 2023. (Courtesy)

It wasn’t too hard to get those smiles, since every single minister could claim to have “won” vast increases of their ministry budgets. Nir Barkat, fresh from his warnings of an “avalanche,” boasted after the meeting of a billion-shekel boost to the Economy Ministry; billions more went to health; a billion to Culture Minister Miki Zohar; a half-billion to Science Minister Ofir Akunis; nine billion to Ben Gvir’s National Security Ministry; 10 billion to Defense Minister Yoav Gallant; two billion to the Negev, Galilee and National Resilience Ministry; tens of billions over several years plus a rail line to Eilat to Regev’s Transportation Ministry; and billions more to expand free preschool down from age three to age two.

That last was announced by Netanyahu himself, who wasn’t about to miss out on the bonanza.

As one business journal quipped on Saturday, “the government accidentally approved a budget for the United States.”

The Netanyahu government, it transpired, was unable to draft its own budget bill. The ball would be kicked over to the Knesset, which against all odds and despite the failure of coalition party leaders to do the same in the cabinet would have to summon the political wherewithal and fiscal responsibility to produce the budget the Netanyahu government had proven incapable of negotiating with itself.

Palestinians look at a damaged building and scorched cars, including some that been taken off the road for spare parts, in the town of Huwara, near the West Bank city of Nablus, February 27, 2023. (AP Photo/Majdi Mohammed)

Failing basic tests of governance

The West Bank now sees roaming gangs of Israelis managing to set fire to a Palestinian town long hours after announcing their intention to attack.

Back in a sweat-filled conference room in Jerusalem, sleep-addled ministers pose for a victory photo over a fake budget bill.

As the pace of terror attacks increases, right-wing ministers who built their political careers on promises of a hard line against Palestinian terrorism hide from the public at the moment of truth.

A judicial reform is being legislated at breakneck speed by a justice minister who refuses to give media interviews and is facing a public backlash probably unprecedented in its intensity.

And all the while, a growing list of foreign banks and investment firms are reexamining their longstanding high marks for the Israeli economy, not because they are opposed to any particular government policy — but out of a growing sense that the country has no policy, that it is ungoverned and beginning to tip over into disarray.

The Netanyahu government is failing basic tests of governance on either side of the Green Line. The costs of failure are clear to all, especially to Netanyahu. If the past week is any indication, he may not have the political maneuvering room to turn things around.

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