While few saw it coming, many observers are now speaking of the staying power of Israel’s economic protest movement as a major threat to the government of Prime Minister Netanyahu. Though the demonstrators seem devoid of a coherent alternative policy and seemingly ignorant of the tremendous damage out-of-control government spending has done in Europe, there is no denying they have tapped into popular discontent with the current state of affairs.
The question is how serious a threat does it pose to Netanyahu in the short term and what impact will it have on the next election.
As Herb Keinon writes in the Jerusalem Post, the high cost of living in Israel has had a terrible impact on middle class Israelis. Moreover, it is an issue that won’t be swept away even if the country finds itself embroiled in a new round of Arab violence in the aftermath of the United Nations General Assembly vote on Palestinian independence in September. That means the prime minister will be spending the coming months dealing with both the threat of a new intifada while also attempting to cope with a broad-based protest movement on the domestic front. These twin challenges will test Netanyahu’s political and diplomatic skills. But the expectation the protest movement will transform the country’s politics in the next year may be overblown.
The first problem with such a scenario is Netanyahu’s main competition is poorly placed to take advantage of the protests. Though Kadima Party leader Tzipi Livni has been trying to capitalize on the discontent as part of her non-stop campaign to abuse Netanyahu, her party has been as much a part of the free market consensus of the last two decades as Netanyahu’s Likud. The notion this alliance of opportunists can morph into a social democratic liberal alternative to Likud will require more fancy footwork than even Livni can manage. As is the case on the Palestinian question, there is actually very little difference between the two parties on economics.
Though Kadima may not be the beneficiary of the protests, they have the affect of pumping some life into the seemingly moribund Labor Party that crashed and burned in the last decade along with public trust in the peace process. But even more likely is the protests will lead to the creation of a new party or two at the next election (which will probably take place sometime in late 2012 or early 2013) that will exploit public dissatisfaction better than any of the other existing leftist factions. That may be more problematic for Netanyahu because, unlike conservative parties in the West, Likud’s grass roots have always been among lower income Sephardic Jews who were not any more enamored of free market economics than kibbutzniks. As Netanyahu has admitted, the economic stance of Likud in the era of Menachem Begin was more Peronist than anything else. Though times have changed, the vulnerability of that constituency to the siren song of government handouts could prove a problem.
But as potent as the protest have been, the notion Israel will actually vote to go back to its socialist roots seems to be rooted more in the prevalent anti-Netanyahu sentiment among the country’s press than anything else. The idea most Israelis want to jettison its status as a first-world state in favor of the impoverished government-run economy that existed before both Labor and Likud adopted the cause of the free market gives the populace little credit. Israelis may not like the high cost of living, but the belief they will vote to become a second Greece seems far-fetched.