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Key points

• Kadima Chairman Shaul Mofaz announced this afternoon that his party will be resigning from Israel’s governing coalition. The move comes after the failure of efforts to write a new law including ultra-Orthodox Jews in military service for all Israelis.
• Kadima’s resignation from the coalition will not immediately bring down PM Netanyahu’s government, but difficulties in negotiating the next budget amidst an economic slowdown are likely to prompt the prime minister to call for elections in early 2013.
• Kadima will struggle to regain voters’ confidence, having failed to achieve any of its main political objectives as a senior partner in Netanyahu’s coalition, and its political future is uncertain.
• Likud may also lose support amongst Israel’s secular, centre-ground voters, having shown a more accommodating stance towards the ultra-Orthodox parties on the issue of military exemption.
• Though the exemption of ultra-Orthodox Jews ends in 1 August, an interim technical solution will likely postpone the mass enlistment of religious Jews to military service until a permanent legal solution is found.

What are the latest developments?

• Chairman of the centrist, secular Kadima party, Shaul Mofaz announced on Tuesday afternoon that his party will be leaving Israel’s governing coalition only two months after the surprise formation of a national unity government with Likud.
• Speaking at a special faction meeting at Kadima’s headquarters in Petach Tikva, Mofaz explained that the decision was made after the failure of intense negotiations to agree new legislation for the enlistment of ultra-Orthodox Jews to military and civilian service.

What led to Kadima’s decision?

• The unity agreement between Kadima and Likud placed special emphasis on passing new legislation to create a more equal national service law for all Israelis, and end the large scale exemption currently available to ultra-Orthodox Jews. After Israel’s Supreme Court found previous legislation exempting most ultra-Orthodox Jews from military service unconstitutional, the new law was supposed to increase the participation of both ultra-Orthodox Jews and Israeli-Arabs in military and civilian service. Though the Likud-Kadima deal was widely criticised as a cynical political move to avoid early elections, there was hope that Kadima’s votes would enable the government to pass a law, overcoming the objections of smaller ultra-Orthodox parties in the coalition.
• A committee led by Kadima Knesset member Yohanan Plesner sought to present the government with the outline of the new law, but it was disbanded days before presenting its recommendations having failed to reach a compromise. Plesner’s proposals, including financial penalties on ultra-Orthodox Jews who evaded service, were firmly rejected by ultra-Orthodox parties. Over the past week, Plesner held intense negotiations with vice-premier Moshe Ya’alon of Likud. Ya’alon, backed by Netanyahu, supported greater compromises to the ultra-Orthodox on the age of enlistment, the number of ultra-Orthodox men who would remain exempt to study in religious colleges, and the sanctions imposed on those who fail to enlist. Disagreements between the sides proved unbridgeable, and Kadima’s leadership faced growing pressure from the party’s parliamentarians to leave the coalition.

What is the political impact of Kadima’s announcement?

• Prime Minister Benjamin Netanyahu’s coalition still holds a Knesset majority of 66 members, even without Kadima’s 28 MKs, and can therefore theoretically remain in power with Knesset going into recess next week.
• However, it is widely speculated that early elections will be held in early 2013. The Knesset returns from its summer recess in October, and then negotiations for a new annual budget must be completed by December amidst indications of a slowdown in the Israeli economy. Netanyahu’s coalition partners will be reluctant to support fiscal tightening in an election year, likely forcing the prime minister to call early elections.
• Netanyahu’s decision to take a more accommodating stance towards the ultra-Orthodox community may damage his standing with Israel’s secular centre-ground voters in the next election. They are extremely unhappy about the fact that they are asked to serve in the military and ultra-Orthodox citizens are not. Secular parties including Kadima, Avigdor Lieberman’s Yisrael Beitenu, Labor, and Yesh Atid (the new party of former journalist Yair Lapid), will attack Likud for pandering to the ultra-Orthodox minority.
• Kadima’s future is highly uncertain. Entry into coalition with Netanyahu enabled Mofaz an opportunity to rebuild the party’s sinking reputation and reposition it ahead of the next elections. Failing to achieve any of its main political objectives, the party will struggle to regain voters’ confidence. Furthermore, facing electoral collapse, Kadima’s MKs are considering their future, with some mulling the option of splitting from the party and joining Likud. At least seven MKs are needed to split the party, but it is still unclear whether that number can be found.

What will happen when the military exemption for ultra-Orthodox Jews expires?

• According to a Supreme Court ruling, the Tal Law, which in effect exempted most ultra-Orthodox Jews from military service, will expire on 1 August 2012 and cannot be renewed. If no legislative alternative is approved by that deadline, thousands of ultra-Orthodox men will be legally required to enlist for service or face criminal prosecution.
• However, all those involved want to avoid a confrontation and it is more likely that the defence ministry will selectively enlist 18-year-old Israelis “according to the military’s needs”. This will temporarily enable the army to exempt individual ultra-Orthodox Jews from service until a long-term legal alternative is found.