As Israeli Coalition Dance Begins, Potential Partners Outline Demands

Coalition building in Israel is never easy, and after his narrow election victory, interim Prime Minister Ehud Olmert is finding it particularly tough. On paper, it should have been simple. Olmert’s Kadima and the like-minded Labor, Pensioners’ and Meretz parties have 60 seats between them, just one short of a majority in the 120-member Knesset. The trouble is that Labor, the second-biggest party with 19 seats to Kadima’s 29, is driving a hard bargain.

Indeed, some of the party’s top people claim that their leader Amir Peretz and not Olmert might form the next government. In response, Kadima is threatening to form a government without Labor.

Both sides know that in the end, the most likely scenario is a government led by Olmert, with Labor as a senior partner. The standoff seems to be over who gets the Finance Ministry. Labor wants it to carry out its socioeconomic reforms; Kadima wants to keep it to make sure government spending is kept under control.

On Sunday, Labor leaders declared that they hoped to form a national emergency government to deal with socioeconomic issues.

Their off-the-record argument was that the election results should be seen as a massive show of support for a new socioeconomic agenda and only tepid backing for Olmert’s plan for unilateral withdrawal from the West Bank. Labor, they whispered, would set up a government with the right and the fervently Orthodox, putting withdrawal plans on the back burner and focusing on issues like poverty, health and education.

The Labor-led coalition would include right-wing parties like Likud, the National Union-National Religious Party and possibly even Avigdor Lieberman’s hawkish Yisrael Beiteinu, all of whom Peretz had ruled out as prospective coalition partners in the election run-up.

Mathematically, it was just possible. Ideologically, it seemed like a bad April Fool’s joke.

Israeli media reaction across the board was scathing. “This is fraud,” wrote Sima Kadmon on the front page of Yediot Achronot. “It is a crude violation of an election promise.”

In Ma’ariv, Nadav Eyal called it “a disgusting maneuver,” and in Ha’aretz, Yossi Verter, in reference to Peretz’s thick whiskers, scoffed that “the new right has grown a mustache.”

Peretz quickly backed down. He put out a statement saying that he had no intention of building an “unnatural coalition.” Reading between the lines, what seems to have happened is that Peretz’s attempt to build a social bloc to pressure Olmert for a better coalition deal got out of hand, as right wingers identified an opportunity to form a government with Peretz to block Olmert’s withdrawal plan.

For Peretz, this proved a double whammy: It hurt his credibility and enabled the fervently Orthodox Shas Party to squeeze Olmert on conditions for supporting him.

The ball is now in President Moshe Katsav’s court. In the Israeli system, the president decides who gets the first chance to form a government and become prime minister. The nominee must be the Knesset member Katsav thinks has the best chance of forming a government.

Normally, it would be the leader of the largest party. But it doesn’t have to be. After holding formal consultations with all the parties represented in the Knesset, Katsav could decide that someone from a party other than the largest has most support in the Parliament.

Now that seems unlikely. After the hullabaloo caused by Peretz’s flirtation with the right, Meretz and Shas seem set to add their votes to those of Kadima and the Pensioners in support of Olmert; Peretz will probably get the recommendations only of Labor and the National Union-National Religious Party, with all the other parties remaining neutral. And that means Olmert is almost certain to get the presidential nod.

So what are the realistic coalition possibilities? And what are the relative advantages and disadvantages of each?

Olmert has at least four coalition options:

1. Kadima-Labor-Pensioners-Meretz-Shas-United Torah Judaism

Advantages: A potentially stable government, giving Olmert a ruling majority of 78 in the 120-member Knesset. It would have 60 seats without the fervently Orthodox, so they would find it difficult to pressure Olmert by threatening to bolt the coalition. By the same token, Olmert would also have close to a majority in the coalition for withdrawal from the West Bank without the fervently Orthodox.

Disadvantages: Olmert would still have to pay a relatively high price in socioeconomic and religious concessions to the fervently Orthodox to get them to join his coalition. He would also have to give Labor senior ministries, possibly finance. And he may feel that Meretz in the coalition gives the government too dovish an image and the Labor-Meretz axis too much power.

2. Kadima-Labor-Pensioners-Shas-United Torah Judaism

Advantages: Without Meretz, it would have a comfortable majority of 73, and be less dovish looking.

Disadvantages: It would leave Olmert more susceptible to fervently Orthodox pressure. Olmert would need Meretz and Arab support from outside the coalition for a majority for withdrawal.

3. Kadima-Labor-Pensioners-Meretz-Yisrael Beiteinu

Advantages: It would have a potentially stable majority of 66 and need a far smaller payoff than a coalition with the fervently Orthodox.

Disadvantages: Yisrael Beiteinu might not support Olmert’s withdrawal plan. More significantly, Labor says it won’t sit in the same coalition as Yisrael Beiteinu because of its advocacy of borders that put tens of thousands of Israeli Arabs on the Palestinian side. If Labor sticks to this, this coalition will not be possible.

4. Kadima-Yisrael Beiteinu-Pensioners-Meretz-Shas-Torah Judaism

Advantages: Without Labor, there would be no major socioeconomic payoff, and Kadima would retain all the major portfolios.

Disadvantages: Olmert would not be able to pursue his unilateral withdrawal policy. The coalition make-up would hurt Israel’s international standing. The coalition would have a majority of 65, but any one party could withdraw or threaten to withdraw and bring the government down.

For Peretz to form a coalition without Kadima he would need the support of the Pensioners, Meretz, Shas, United Torah Judaism and Likud, for a majority of just 61. This, if it ever was a serious possibility, has now been taken firmly off the table.

At this point, Olmert seems most likely to form the next government with Labor, Pensioners and the fervently Orthodox. The open questions are whether Meretz will be invited to join, and how the Cabinet ministries will be divided.