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Netanyahu Succeeds In Forming New Coalition Cabinet After Yair Lapid Agrees To Become Finance Minister

Naftali Bennett Also Decides To Join New Government That Will Apparently Muster Clear Majority In Knesset

Yair Lapid

 Isracast: Yair Lapid Has Guts In Accepting Problematic Finance Portfolio - Israel Will Be Watching If He Also Has Brains & Political Savvy To Cope With Huge Deficit Left By Outgoing Netanyahu Administration

 Yair Lapid has apparently resolved the current coalition crisis in Israel by agreeing to accept the Finance Portfolio in the new Netanyahu cabinet. It's still not official, but reliable sources on both sides are signaling the two leaders have now overcome this hurdle. When they meet again, they are also expected to agree on the numbers of ultra-orthodox men who will start serving in the IDF. Lapid, leader of 'There's a Future' party may be on his way to becoming Israel's next political hero or a washed-up politician, it will all depend on how he fares as new Finance Minister.

Yair Lapid (photo: Yair Lapid Facebook)

 It is apparently all over after Yair Lapid accepted Prime Minister Binyamin Netanyahu's take it or leave it offer – 'You can't be foreign minister, take finance!' With the outgoing government running up a huge forty billion shekel deficit, (well over $10 billion), the finance portfolio became the hottest potato in the cabinet. The new finance minister will have to swiftly slash twenty billion shekels from the state budget which means lowering the economic boom on Israeli citizens. During the election campaign, Netanyahu pooh-poohed the need of raising taxes while Stanley Fischer, the outgoing governor of the Bank of Israel, posited that higher taxes were a must. I'm going with Fischer who might be in the running to becoming the next Governor of the U.S. Federal Reserve.

You have to admire Lapid's guts. The fifty year old charismatic TV presenter and newspaper columnist has absolutely no background or education in economics. But Bibi presented him with an offer Lapid could not refuse. Netanyahu had publicly promised former Foreign Minister Avigdor Lieberman that he could continue in the job, if Lieberman survived his current legal prosecution for breach of faith. Lieberman's party has eleven of the 'Likud- Our Home' merger, and if Bibi balked on his word, Lieberman's party would split and possibly side with Lapid for prime minister.  And if Lapid rejected Bibi's offer of finance, the prime minister would then fall back on the ultra-orthodox parties to form a new-old coalition. Bear in mind that Lapid ran on a ticket of kicking the Ultra-orthodox out of the government and getting them into the IDF. Lapid would have been accused of letting the ultra-orthodox back into the government because he chickened-out of taking the job of finance minister. Has Netanyahu set a trap for Lapid, possibly his most dangerous rival in the next election? Netanyahu knows this will be in the back of many voters' minds and therefore he will have to be seen as backing his new finance minister when justified. Overall, Lapid, like Bibi, is a capitalist, but he argues that politics have warped Israel's economic system against those Israelis ‘who serve in the army, pay taxes and do not live on government handouts’.

Nonetheless, drafting a new state budget that requires spending cuts of twenty billion shekels is a titanic task for even a top-drawer economist. And it is one thing to preach highfalutin social ideals, but it's another to put them into practice. Just ask U.S. President Barack Obama. Outgoing Finance Minister Yuval Steinitz, an inexperienced PhD in philosophy, recommended that Lapid depend on 'the sound advice' of the ministry's mandarins. But in doing so, Steinitz got into hot water by announcing several controversial measures that may have made economic sense but were politically disastrous and were countermanded by Netanyahu, who was the real boss. But Lapid has his political agenda – to improve the lot of young middle class Israelis who have served in the IDF and gotten a good education but cannot make ends meet because of skyrocketing housing prices. So Lapid would be well advised to appoint an ad hoc council of economic advisers who could provide economic solutions that also further Lapid's campaign promises.

Now that Lapid is on board, his erstwhile allies, Naftali Bennet and even Shaul Mofaz will not be far behind. If so, Netanyahu will enjoy a 70 member majority in the 120 seat Knesset. As for the key defense portfolio, the Likud Moshe Yaalon, a former IDF Chief of Staff, is a natural choice.

FSA (Free Syrian Army) figther in Alepo, Syria

Regional Roundup…

The armed abduction of 21 UN peace monitors by Syrian rebels has a number of ramifications for the Syrian-Israeli frontier and far beyond. First, it has brought the civil war in Syria ever closer to Israel. The soldiers from the Philippines were part of UNDOF, the UN Disengagement Observer Force, which was established forty years ago at the end of the Yom Kippur War. It is a fact that since then the Assad regime scrupulously observed the cease-fire along the Golan Heights. The Syrian army and the rebel forces, including Al Qaeda, are now battling ever closer to Israel and the Syrian side of the border is rapidly turning into a no-man's land where anything goes. Al Qaeda is a law unto itself and after the Assad regime is toppled, it is likely to turn its guns and rockets in the direction of Israel. In light of this rising tension, the IDF has stepped up its readiness. Recently it was reported that regular troops have replaced reservists along the Syrian frontier and Israel is also building a stronger security fence as it had to do along the Egyptian frontier in Sinai.

Ethno-religious composition of Syria

Pros & Cons of Syria's Breakup…

The Israeli assessment is that the eventual fall of the Assad regime will lead to the breakup of the state into separate independent cantons controlled by the various communities: Kurds, Christians, Alawites, and Sunnis; even Hezbollah Shiites from south Lebanon have gotten into the act, as well as the Quds force, Iran's foreign legion. No longer will there be a central government ruling from Damascus. Obviously, this chaotic situation reduces the strategic threat posed to Israel by the Syrian army. Moreover the flow of weapons and missiles from Iran through Syria to Hezbollah has nearly been shut down. While this is a plus for Israel, what will happen to the huge arsenal of chemical weapons which have been stockpiled inside Syrian army installations? So far these lethal weapons remain under governmental control, but could they fall into Al Qaeda hands in the future? And what forces will move in and take control of the areas adjacent to Israel?

Recent regional developments have vindicated Israel's caution about the Arab Spring and her refusal to join the wave of euphoria that swept many Western countries. In the wake of the revolutions to expel hated dictators, Libya and Syria have been plunged into bloodbaths with the end still not in sight. Even in Egypt, the ousting of the Mubarak regime has led to the rise to power of the Muslim Brotherhood that is trying to impose an Islamist dictatorship on the Egyptian people. And who can foretell what will be the fate of Jordan, another of Israel's neighbors and peace partners. As for Lebanon, it has always been a patch-work of rival ethnic and religious communities; perhaps the forerunner of what lies ahead for Syria. At least in Egypt, the vast majority of its people are Sunni Muslims who differ over whether the state will be turned into an Islamist dictatorship along the lines of Iran. But Syria and Lebanon were created by British and French diplomats back in 1916 after the fall of the ruling Ottoman Empire of Turkey. They simply sat down with a map of the Middle East and carved out new states in the Treaty of Sykes-Picot. However, Syria and Lebanon are two examples of states comprised of warring ethnic and religious communities. If anyone has any doubt about the idea of Israel including all the Palestinians in the West Bank into one bi-national state where everyone would live peacefully ever after, they should ponder what has transpired in Syria and Lebanon.

Defense Minister Ehud Barak speaking at AIPAC

Iran & North Korea…

Where does North Korea get the chutzpa to threaten the U.S. with a nuclear attack? North Korea, an impoverished state that cannot even feed its own people, picks a fight with the world's number one super-power. Obviously it's the result of how an aggressive 'crazy state' will behave once it acquires nuclear weapons. But it is apparently not so obvious to some leading American experts who contend this does not apply to another crazy state, Iran, which the U.S. State department has found to be the greatest exporter of international terrorism. When it comes to Iran, these eggheads choose to draw an analogy with the Soviet Union which abided by 'MAD' – the theory of Mutually Assured Destruction. On the contrary, a fanatical state such as Iran that has adopted an Islamist religious mission to dominate the Muslim world will be far more aggressive than its ally North Korea. That is why Defense Minister Ehud Barak stressed at an AIPAC convention in Washington that 'We mean it!' when it comes to Iran turning into another North Korea.


David Essing

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