Coalition Crisis Resolved

A bitter dispute over portfolios between two religious parties that could have brought down the Labor-Likud unity government, was resolved Thursday.

But the crisis atmosphere generated by the imbroglio which involved two factions, each with only four Knesset mandates, reminded Israelis of the fragility of the three-month-old unity coalition and raised concern that it could founder easily if disputes arise over more vital and fundamental issues.

A compromise formula hammered out by Labor and Likud leaders at meetings that began Wednesday and lasted into the early hours of Thursday, allows Shas, a client of Likud, and the Labor-backed National Religious Party to share in the allocation of funds to local religious councils.

SHARING IN THE ALLOCATION OF FUNDS

The sharing will be between the Interior Ministry, assigned to Shas, and the smaller Ministry of Religious Affairs which the NRP agreed some time ago, albeit reluctantly, to accept. The dispute arose when the NRP demanded that certain religious functions, including the allocation of funds, be transferred from Interior to Religious Affairs. Shas refused.

Shas leader Rabbi Yitzhak Peretz submitted his resignation from the Cabinet Sunday. It became official Tuesday. With the compromise in place, he agreed to return and was sworn into office as Minister of Interior. Previously, he had been a Minister-Without-Porfolio. NRP leader Yosef Burg, who had served as Minister of Interior in many previous governments, is now Minister of Religious Affairs.

A SHOCK TO THE POLITICAL ESTABLISHMENT

But the entire episode, which Labor Party Secretary General Uzi Baram had termed “a storm in a teacup”, shook Israel’s political establishment. Likud, the patron of Shas, insisted that its honor and credibility would be destroyed if it failed to back up the small Sephardic religious faction formed only just before last July’s Knesset elections.

Deputy Premier David Levy, a powerful voice in Likud, hinted in public statements during the week that if the Shas-NRP dispute was not satisfactorily resolved, Likud would abandon its coaltion with the Labor Party.

Deputy Premier and Foreign Minister Yitzhak Shamir, leader of Likud, cut short a Latin American visit and cancelled an appearance in New York to return to Jerusalem Monday to deal with the crisis. Shamir, after a lengthy meeting with Premier Shimon Peres, the Labor Party leader, told reporters that it was up to the Prime Minister to settle the matter or “he knows what we will do.”

This seemed to be another hint that Likud might break up the coalition. It was re-enforced when Shamir summoned Likud ministers to meet in caucus Thursday. But the compromise reached prior to the meeting rendered moot what action Likud might have taken.

Apart from tough public statements on both sides, it appeared that neither of the two major parties was inclined to break up the coalition at this time. The compromise was worked out by Levy and Justice Minister Moshe Nissim, representing Likud and Deputy Premier Yizhak Navon and Energy Minister Moshe Shahal, both of Labor.

Peretz of Shas and Rafael Ben-Natan of the NRP remained in the background. Levy reportedly told Peretz afterwards that he refused the compromise, Likud might not continue its support. Navon similarly lectured the NRP, stressing that the crisis must be ended so that the government can resume dealing with the “really important issues facing the nation.”

RIFT OVER OTHER ISSUES

The priority issue is the economic crisis. Also high on the agenda is withdrawal of the Israel Defense Force from Lebanon, improvement of relations with Egypt and progress on the Palestinian problem.

Shamir stressed Thursday that the unity government was basically a union of two rival parties for a national cause. Likud and Labor, at the moment, appear to be in broad agreement over conditions for pulling the IDF out of south Lebanon.

With respect to the Palestinians, Shamir did not rule out contacts with King Hussein of Jordan, though the two parties are far apart on what Israel’s negotiating stance should be if and when Hussein agrees to talk.

But there is a sharp rift over relations with Egypt. Shamir said he favored improved ties with Cairo but added that Israel’s political initiative should not always center on what Israel should give up. He accused Egypt of violating every clause of the 1979 peace treaty dealing with normalization of relations. He made it clear that nothing would be done with respect to relations with Egypt without the approval of Likud.

Beyond these issues there is the long simmering conflict between Labor and Likud over settlement policies on the West Bank. It has been held in abeyance recently because the economic situation bars additional funds for settlement activity. But that issue, or any number of others, could erupt at any time. Meanwhile, the outlook for the unity government remains unclear.