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Israel set for snap election as budget deadline nears

Failure to pass a fiscal package could mean Israel going to the polls in March, a far riskier prospect for Israel's longest-serving leader, say analysts.
Image: Israeli Prime Minister Benjamin Netanyahu and Benny Gantz, centrist Blue and White leader, and Netanyahu's partner in his new unity government, wear face masks as they talk during a swearing in ceremony of the new government
Israeli Prime Minister Benjamin Netanyahu and Benny Gantz, centrist Blue and White leader, wear face masks as they talk during a swearing in ceremony of the new government at the Knesset in Jerusalem in May. Amos Ben Gershon/Knesset Spokesperson's Office / Reuters file

JERUSALEM — Israel on Tuesday was on the brink of a fourth national election in two years after Prime Minister Benjamin Netanyahu and his main governing partner, Benny Gantz, failed to resolve a dispute over the budget.

Parliament voted late on Monday against an attempt by both men to delay a deadline of midnight on Tuesday for approval of the fiscal package.

Under the law, failure to pass it by then would mean Israel going to the polls in March, and neither parliament nor the cabinet has passed it yet, a process near impossible to complete in a single day.

Barring a last-minute surprise, an election would plunge Netanyahu into a battle for survival as public anger has mounted over his handling of the coronavirus crisis and criminal corruption charges that he faces at court.

Though polls show Netanyahu's right-wing Likud party emerging as the largest faction in parliament, surveys also predict a strong showing for parties across the political spectrum seeking to unseat him.

Netanyahu and defense minister Gantz, head of the centrist Blue and White faction, established a unity government in May after three inconclusive elections held since April 2019.

But unlike those campaigns, Netanyahu now faces political challengers from Israel's right-wing in a ballot that will be held in the shadow of the pandemic, which has hit Israel's economy hard.

Likud and Blue and White's coalition deal involved Gantz taking over from Netanyahu as prime minister in November 2021, and passing a bi-annual budget for 2020 and 2021, a de-facto insurance for the power-sharing deal.

But even as that accord was being inked, many analysts argued that Netanyahu would not relinquish his powerful post, and Likud has since demanded to pass the budgets separately, while Blue and White insisted Netanyahu stick to their deal.

Analysts said Netanyahu had been pushing for an election in May or June next year, after the coronavirus crisis was expected to ease and the economy to begin to recover, hoping to win a parliamentary majority that would grant him immunity and put off his trial. Netanyahu denies any wrongdoing.

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But a March vote appears far riskier for Israel's longest-serving leader.

"It's a whole new ball-game," said Reuven Hazan, professor at the Hebrew University's political science department. "Netanyahu is far more vulnerable now," said Hazan. "The chances of him not being prime minister are higher than they were."

Netanyahu has denied pushing for an early election and has blamed the political turmoil on Gantz's Blue and White faction. The deadlock has plunged Israel into more economic uncertainty at the end of a year when a pandemic-induced slump is expected to shrink gross domestic product by 4.5 percent and with the jobless rate standing at 12.1 percent.

In an upcoming election, Netanyahu would likely play up the country's vaccination drive, which began this week, as well as his diplomatic credentials following a string of deals with Gulf states, Sudan and Morocco, that were brokered by the United States, Hazan said.

Netanyahu enjoyed a close relationship with President Donald Trump, who made a number of pro-Israel moves during previous elections. But with President-elect Joe Biden set to take office in January, Netanyahu will lose a major campaign asset, Hazan said.