Likud MK: PM should consider ditching Lapid from coalition

Coalition Chairman MK Yariv Levin (Likud) urged Prime Minister Benjamin Netanyahu on Saturday to consider a reorganization of the coalition, asserting that Finance Minister Yair Lapid’s Yesh Atid party may have to be pushed out of the government.

“We have to consider the possibility of a change in the composition of the coalition, by the inclusion of the ultra-Orthodox parties,” Levin said during an interview with Channel 10. “It might be that there will be no choice but for Lapid to leave [the government].”

Levin went on to criticize Lapid, after the finance minister threatened on Wednesday to pull out of the coalition if taxes were raised to cover the costs of Operation Protective Edge, estimated at $2.5 billion.

“This coalition can function if the partners want it to,” Levin said.

“[But] if [Lapid’s] flippant, irresponsible and even childish, behavior continues, then we may definitely have to consider the possibility of a change in the coalition.”

Lapid’s exit from the coalition, bringing his Yesh Atid party’s 19 seats with him, would immediately cause the government to collapse and necessitate new elections unless replacement coalition partners could be found.

The finance minister has repeatedly stated over the past week that raising taxes as a result of the 50-day military campaign against Hamas was a wrong move, pushing instead to increase the deficit cap to 3.5% of GDP in the 2015 budget to cover the defense spending.

Bank of Israel head Karnit Flug, Netanyahu, and Economy Minister Naftali Bennett have all publicly opposed the plan.

Flug, who sharply criticized Lapid’s remarks, said Tuesday that exceeding a 3% deficit in 2015 will ultimately lead to a reduction in the education, welfare and health budgets and expose the economy to significant risk. The Bank of Israel head added that increases to the deficit to cover non-recurring expenses like Operation Protective Edge are justified, however a deficit exceeding 3% of GDP will signal the loss of Israel’s commitment to fiscal responsibility and risk a loss of credibility.

Bennett also opposed Lapid’s proposed budget increase during an address at the Calcalist economics conference Tuesday. At the conference hosted by the Israeli daily business paper, Bennett warned that increasing the deficit without addressing Israel’s underlying economic policies is tantamount to pushing the next generation deeper into debt.

Marissa Newman, Tamar Pileggi and Adiv Sterman contributed to this report.