Tzipi Livni Begins Forming Government

Tzipi Livni Begins Forming Government

The newly elected head of Kadima, Tzipi Livni, began forming her governing coalition this week after President Shimon Peres commissioned her to do so on Monday, Sept. 22. Ehud Olmert, who resigned on Sunday the 21^st, remains interim Prime Minister until Livni succeeds. If Livni fails to secure the support of a majority of the Knesset, Israel will go to elections, but it now seems likely that Livni will be able to reconstitute Ehud Olmert’s coalition.

Several important issues are at stake in the negotiations. Labor may well demand the replacement of Justice Minister Daniel Friedmann, who favors significant reform of the powers of the judiciary and seeks to influence the composition of the Supreme Court. Labor has positioned itself as the defender of the judiciary’s interests, identifying them with “rule of law.” Livni does not share this perspective.

In negotiations with Shas, Livni will face demands in two separate areas. Shas may seek to restrict further the scope it gives Livni to negotiate a settlement with the Palestinians. Till now Shas has insisted that the negotiations, which Livni conducted as Foreign Minister, not include Jerusalem. At the same time Shas has consistently refused to take seriously well-founded rumors that in fact all subjects, including the division of Jerusalem, are being discussed with the Palestinians, relying on Livni’s denials to justify its continued participation in Olmert’s government.

Shas’ other demand is to restore all or part of Israel’s generous social welfare policy, sharply cut back five years ago when Binyamin Netanyahu became Finance Minister in the depths of a severe recession. Both Netanyahu of the Likud and the Kadima party see the permanent reduction of social welfare benefits a key element in the economic strategy that has enabled the Israeli economy to grow rapidly in the last five years. Raising social welfare expenditure at this juncture is likely to reduce the Israeli economy’s ability to ride out the effects of a global recession, if one is caused next year by the American financial crisis.

Another issue hovering on the edge of the negotiations is the prospect that Israel may soon take unilateral action against Iran’s nuclear project. This would almost certainly plunge Israel into renewed warfare with Hizbullah in Lebanon and Hamas in Gaza, and may well involve Syria as well, amounting to a security challenge unequalled since the Yom Kippur War. Defense Minister Barak called for the Likud, under Netanyahu, to join a national coalition government. Netanyahu for his part professes no confidence in a Livni-Barak government, claiming that their policy of negotiation with the Palestinians and Syria is inconsistent with Israel’s acute security concerns and is likely to lead to Iran and its proxies establishing control over the Golan Heights and the West Bank. For now, the Likud will remain in opposition.