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Key Points

• The Kadima leader Tzipi Livni informed President Shimon Peres on Sunday that she has been unable to form a new governing coalition. This announcement makes the holding of early general elections inevitable.
• In theory the President can ask another Knesset member to try and form a coalition, but he is likely to decide that a government cannot be formed, which will lead to a general election being held in either January or February. 
• The polls currently indicate that Kadima and Likud are running almost neck and neck, with a slight advantage for Kadima. As is usually the case in Israeli elections, the key issue will be the conflict with the Palestinians and the broader question of how to move forward on peacemaking without compromising Israel’s security.
  
  Introduction 

  Kadima Leader and Foreign Minister Tzipi Livni informed President Shimon Peres on Sunday that she has been unable to form a new governing coalition. This announcement makes the holding of early general elections inevitable. This latest development is the result of a series of events which took place last week and over the weekend.  This document will look into the events leading up to Livni’s announcement, the procedure and time frame for general elections, and the state of affairs in the three major parties – Kadima, Likud and Labour – as the prospect of early elections looms.What led to the failure of the coalition talks?

  Following her victory in leadership elections in Kadima, it was expected that Foreign Minister Livni would seek to form a new governing coalition, rather than go straight to general elections.  This was seen as in Livni’s interest, because she would benefit from the stature attached to a sitting prime minister in a future election campaign.  Opinion polls since mid-2006 have for the most part indicated a likely Likud victory in general elections, so it was also seen as in Kadima’s interest to put off elections.

  However, the attempt to build a new coalition has not succeeded. The stumbling block proved to be the negotiations with Sephardi ultra-Orthodox party Shas.  Shas demanded a sum of NIS 1 billion (£165m) for child allowances.  Livni made a counter offer of NIS 650 million (£108m).  Shas’s Council of Torah Sages, a committee of senior Rabbis which is the ultimate authority in the ultra-Orthodox party, met to discuss this matter and on Friday party leader Eli Yishai announced that Shas had decided not to join the coalition.

  Kadima officials accused the opposition Likud party of interfering with the negotiations by making a counter offer, which far exceeded Kadima’s offer, to join a Likud led government after elections, thus ensuring Shas’s refusal.  Likud spokespersons, for their part, blamed what they referred to as Tzipi Livni’s ‘inexperience’ for the failure of the negotiations.  However, it was certainly in Likud’s interest to prevent Livni forming a coalition, and it is thus likely that the Likud leader Binyamin Netanyahu made every effort to use his own political influence to scupper her chances.

  Livni, for her part, said that she felt she had to ‘draw the line’ at ‘impossible demands raised by potential coalition partners.  The Kadima leader told reporters that ‘when it became clear that every person and every party was taking advantage of the situation to make illegitimate demands – both economic and diplomatic – I decided to put a stop to it and go to elections.’ [i] She has promised the Israeli electorate a ‘different kind of politics’ and her decision also reflects her desire not to sacrifice her reputation for strong principles and integrity, which has earned her respect with the public.

  Following the Shas announcement, the Degel Hatorah party, which represents half of the Ashkenaz ultra-Orthodox United Torah Judaism faction, announced that it too would not be joining a coalition led by Livni.  This effectively foreclosed any possibility of Ultra-Orthodox parties helping Livni form a coalition that would prevent early elections. 

  The refusal of Shas and Degel Hatorah to join the coalition did not, however, signal the end of Tzipi Livni’s options for forming a government.  According to the current Knesset arithmetic, she could have tried to form a coalition based on Kadima (29 seats), Labour (19), the liberal left-wing Meretz (5), the Pensioners Party (6) and a single member list formed by a former Pensioners’ Party MK.  This would give Livni 60 seats. Her government would not have an overall majority in the 120 seat Knesset and would have been reliant on support from the Arab factions outside the government to allow it to function.  Meretz leader Yossi Beilin encouraged Livni to take this step.  However, Livni made clear that she had no intention of pursuing this approach, which would have placed her at the head of a weak and vulnerable government, leaning too far to the left of the political centre ground she wants to control. In any case, Pensioners Party leaders rejected a request by Kadima for a meeting on Saturday night.  Thus, after consultation with her advisers on Saturday, Livni made the decision to recommend to President Peres that general elections be held. [ii]

  What happens now?

  President Shimon Peres, according to Israeli law, had the option of giving another faction leader a period of 28 days to try and form a coalition. But at the opening of the Knesset on Monday, with no leader having a realistic prospect of forming a coalition, he confirmed that Israel was heading for elections.  In theory, a majority in the Knesset could still try, in any case, to form a coalition in the next three weeks, but this is not expected. Analysts in Israel are now talking of February 3or 10 as the likely date of the elections. Whilst elections should be held 90 days from the formal announcement of the President that a government cannot be formed, this process can be interrupted if the heads of Knesset factions agree on a specific date for elections, and vote to pass a law to that effect. Tzipi Livni, in an interview on Sunday, expressed her preference for this possibility, and for concluding the elections process ‘within two months.’  Kadima coalition chairman Yoel Hasson is reported to be preparing legislation that would lead to the elections within 90 days, but each party will make their own calculation about whether this timing is in their interests.

  Within the parties, meanwhile, the process will now begin of selecting the list of candidates for the Knesset, and determining in what order the candidates will be ranked.  Primaries are to be expected in the three major parties.  In Israel, a system also exists of allowing favoured individuals to be parachuted into a reserved place on the list, according to the wishes of the party leadership. 

  Situation in the parties on the eve of the campaign

  If, as seems inevitable, elections take place in early 2009, who are the favourites to win, and what is the internal state of affairs in the major parties?

  According to a poll conducted by the Teleseker agency for Maariv newspaper and published today, if elections were held tomorrow, Kadima would be victorious, with 31 seats.  Likud would be second, with 29, while Labour would be left far behind, with only 11 seats. [iii] An additional poll by the Dahaf Research Institute has Kadima on 29 seats, Likud with 26 and Labour with 11. [iv]

  The encouraging polls notwithstanding, some Israeli analysts consider that Kadima Chair Tzipi Livni’s image will suffer as a result of the perception that she was unsuccessful in conducting the negotiations.  Ofer Shelah, writing in Maariv, considered that “Livni will not love the comparison but this is the second time she has allowed events to dictate a problematic decision for her: The first time, of course, was when she did not resign after the Winograd Committee preliminary report [into the government’s handling of the Second Lebanon War].”  Whilst Aluf Benn in Haaretz took a similar view, Dan Margalit in Yediot Ahronot took a different line, suggesting that Livni’s refusal to accede to Shas’s budgetary demands will lead to her being perceived by the electorate as a candidate of principle. [v]

  The Kadima leader faces an additional task of ensuring unity in the top echelons of her party.  As a new leader now entering general elections without the status attached to a sitting prime minister, this is a considerable challenge.  Maariv even reported on Sunday that Transport Minister Shaul Mofaz, who was defeated in the Kadima party leadership election, is engaged in attempts to assemble his own coalition. Whether this story is true or not, it should be noted that Livni’s victory over Mofaz in the primaries was narrower than expected, and the loyalty of some of her party’s senior figures is less than assured. [vi]

  The Likud party faces no such unity issues, with the ranks within the party generally unified behind Benjamin Netanyahu’s leadership.  Having led in polls consistently over the last year and a half, the coming elections had been considered Likud’s to lose. But as the more recent polling suggests, the Likud leader faces a serious challenge. In March, 2006, Likud suffered the most serious defeat of its history, reducing it to a mid-level Knesset list of only 12 seats.  This time around, Netanyahu will be seeking to claw back the support of centrist voters from Tzipi Livni and Kadima.  Netanyahu’s economic record may make him vulnerable also to challenges from Shas and the Russian immigrant Yisrael Beiteinu party for the support of Israelis in poorer peripheral areas. Netanyahu, as Finance Minister in Sharon’s government, implemented policies which involved cutting benefits for poorer Israelis.  Likud has traditionally drawn its support from these less well off sections of the population, and their resentment was a factor in Likud losing support in peripheral areas of the country in 2006, with Shas and Yisrael Beiteinu the beneficiaries among voters of Sephardi-Middle Eastern and Russian origin respectively. 

  Nevertheless, initial indications are that Netanyahu intends to run a campaign based centrally on his achievements as Finance Minister.  This indicates that Netanyahu has set his sights on the large number of middle-class, centrist voters whose support brought Ariel Sharon and Likud their major victories in 2001 and 2003, and who then deserted to Kadima in droves in 2006.  Netanyahu is thought to consider that his record as Finance Minister will differentiate him from Livni in terms of achievements likely to appeal to these voters. [vii]

  In the battle for the centre ground, Netanyahu is also understood to be negotiating to bring in former Chief of Staff Moshe Ya’alon, and former Justice Minister Dan Meridor to the Likud Knesset list. The presence of these two high-profile and respected public figures would significantly boost the centrist credentials of the Likud list. [viii] 

  Ehud Barak’s Labour is entering the race in by far the weakest position of the three main parties, with a situation of some internal discord.  Barak is generally seen to have had a fairly successful period of incumbency as Defence Minister.  However, all polls have shown Labour losing strength in the elections. Despite his competent ministerial performance, Barak has failed to appeal personally to the electorate, and his sceptical approach to the Annapolis negotiations championed by Kadima has left his party struggling for an identity. Furthermore, the party is carrying a deficit of NIS 70 million, and there have even been rumours of a leadership challenge to Ehud Barak prior to the elections. Such a challenge is unlikely to emerge, but it is indicative of the extent of the task facing Barak.

  As is usually the case in Israeli elections, whilst the economy will be a factor, the key issue will be how to move forward on peacemaking without compromising Israel’s security. Likud is likely to focus on the dangers of the Iran-led regional bloc, and will seek to warn that territorial concessions to the Palestinians are likely to benefit this hostile bloc.  Kadima, meanwhile, is likely to focus more on the hopes offered by the Annapolis process and the negotiations with the PA. Since both parties will be competing for centrist votes, however, the likelihood is that the differences will be somewhat blurred, with each party in essence trying to depict itself as the voice of responsible pragmatism and its opponent as naïve or ideological. Labour, too, will be competing for the same ground, but will have to work hard to find a distinctive voice and appear relevant.

  Conclusion

  The next elections are shaping up to be a contest between Kadima and Likud, for the bloc of centrist voters which brought Kadima victory in 2006.  Labour, meanwhile, was characterized by Israel Channel 2 News last night as ‘fighting for its political life.’ [ix] With the polls indicating that the Kadima and Likud are running almost neck and neck. The right to lead the next Israeli government will be won by the party best able to position itself as the force of the credible centre.

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[i] Shelly Paz, “Livni: Nation is headed for elections,” Jerusalem Post, October 26, 2008.  www.jpost.com

[ii] Ibid. 

[iii] Maariv, October 27, 2008. 

[iv] “Poll: Kadima to get 29 seats, Likud 26, Labour just 11,” Jerusalem Post, October 27, 2008.  http://www.jpost.com

[v] Editorials from the Hebrew press, issued by the Government Press Office, October 26, 2008. 

[vi] Maariv, October 26, 2008. 

[vii] Israeli Channel 2 News, October 26. 

[viii] Ibid. 

[ix]  Ibid.