Ministers okay interim financial package as new elections set to be triggered

Knesset and cabinet convene for likely last time before Israel heads into 4th campaign season in 2 years; Likud MKs attempt to block election funding for Gideon Sa’ar’s party

Lawmakers vote against a bill to delay the budget deadline on December 22, 2020 (Danny Shem Tov/ Knesset Spokesperson)
Lawmakers vote against a bill to delay the budget deadline on December 22, 2020 (Danny Shem Tov/ Knesset Spokesperson)

Ministers on Tuesday night advanced an interim financial package to tide over costs during the upcoming election campaign season, as Israel was poised to head to the fourth round of general elections in under two years.

The Knesset plenum convened Tuesday afternoon for what was almost certainly the last time before the parliament automatically dissolves at midnight over the failure to pass a state budget.

As MKs gathered in the plenum, the government held a virtual cabinet meeting, during which ministers green-lighted a package of “continuing budget” measures.

The approval of this package doesn’t stave off the Knesset’s collapse, as a full state budget for 2020 must be okayed by the midnight deadline. Rather, it will give the transitional government greater financial flexibility in the three months before the likely March 23, 2021, election day.

Israelis wearing masks of Prime Minister Benjamin Netanyahu, left, and Defense Minister Benny Gantz at a protest in Tel Aviv on December 2, 2020. (Jack Guez/AFP)

Ministries have been operating on a continuing budget based on 2019’s budget, which was approved during 2018. No budget has been passed since then, due to the three consecutive election campaigns. Following the formation of the government in May, the budget was held up amid infighting between the Likud and Blue and White parties.

Ministers from Defense Minister Benny Gantz’s Blue and White party voted to approve the interim budget resolution, which Channel 12 news said was pushed by Prime Minister Benjamin Netanyahu’s Likud party.

Following the vote, Gantz said Blue and White backed the measure “out of responsibility” for Israelis and “to allow the government to minimally function” during the likely-upcoming transitional period. He also tore into Netanyahu and Likud Finance Minister Israel Katz over the lack of a state budget.

“The prime minister and finance minister behaved with criminal abandon by failing to bring a state budget for 6 months, in blatant violation of the [coalition] agreement and all out of narrow, personal and legal interests,” Gantz wrote on Facebook, referring to Netanyahu’s trial on graft charges.

He added: “Despite this cynicism, I won’t allow Israeli citizens to be harmed. This isn’t my way, this isn’t the way of Blue and White.”

Gantz also said his party would work to ensure the additional funds only go to government ministries and “essential needs,” not to “cronies and political needs.”

Ahead of the Tuesday night deadline, Likud also raised a number of objections to legislation on campaign party funding that if approved would deny funds to Gideon Sa’ar’s New Hope party.

Gideon Sa’ar visits Hadassah Hospital Ein Kerem in Jerusalem, on December 16, 2020. (Yonatan Sindel/Flash90)

Sa’ar quit Likud earlier this month to form New Hope and challenge Netanyahu to the premiership. The bid to deprive him of funding was apparently also supported by Gantz’s Blue and White, according to Hebrew media reports.

“The brutal attempt to anti-democratically undermine election funding for New Hope will bring the opposite result. The people of Israel will choose a new hope over fear,” Sa’ar wrote on Twitter in response.

A Justice Ministry representative signaled the Likud objections would face legal obstacles, saying they “change the rules of the game” for New Hope and could hurt the party’s ability to compete equally with other factions.

During the cabinet meeting, Netanyahu said “it’s unfortunate we’re going to elections. It’s still possible to save the situation,” according to the Kan public broadcaster.

However, the prospect of averting elections appeared to have disappeared overnight when the Knesset narrowly rejected a bill to briefly delay the 2020 state budget deadline.

Prime Minister Benjamin Netanyahu and Defense Minister Benny Gantz, at the weekly cabinet meeting, at the Ministry of Foreign Affairs in Jerusalem on June 21, 2020. (Marc Israel Sellem/POOL)

Netanyahu took part in the vote, casting his ballot in favor of the bill and apparently believing that it would win a majority. But three Blue and White MKs defied party discipline and voted against it, as did Likud MK Michal Shir — who entered the Knesset at the last minute, having earlier indicated that she was unwell — and the bill fell in a 49-47 vote.

Had the bill passed, it would have delayed the deadline to pass 2020’s budget from December 23 to December 31. The deadline for approving a budget covering 2021 would have been January 5.

Earlier Monday evening, both Likud and Blue and White said that their negotiations had broken down and blamed each other for the failure to reach an agreement.

Knesset members shout at each other after a bill that might have staved off elections is defeated, December 21, 2020 (Knesset channel screenshot)

Under the power-sharing deal between Likud and Blue and White, a failure to pass a budget was the lone visible loophole that would enable Netanyahu to avoid having to give up the premiership to Gantz in November 2021. Likud has been holding up the budget for months in an effort to renegotiate a more favorable coalition agreement.

Opinion polls indicate that Blue and White, which won 33 seats in the March 2020 elections, is hovering at some 5 seats — barely above the Knesset threshold. Likud is at some 28 seats, down from the 36 it won in March, having lost some support to Sa’ar’s New Hope party, which is polling at 19-20 seats. Sa’ar’s emergence as a challenger potentially complicates Netanyahu’s path to retaining power, even though the surveys all show a marked rise in support for parties on the Israeli right at the expense of the center-left.

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