Public Enemy No.1
There have been harsher budget proposals than the one brought forward by Finance Minister Yair Lapid and his eunuchs last week, but the ensuing public uproar is quite unprecedented.
The reason for this is threefold.
Firstly, it is only three months since the elections. All the contending politicians rightly assessed public opinion and adjusted their campaign agenda accordingly, making economy and an equal share of the burden the main theme, and none more than Lapid, who repeatedly proclaimed himself as the savior of the Israeli middle-class. So obviously his voters, of whom a great many belong to the middle-class, feel somewhat disillusioned with their choice as they face tax increases and income drops.
Secondly, until only a few months ago Israelis were told that the economy was shipshape. Netanyahu and his former Finance Minister reminded us at every turn that the Israeli economy was flourishing compared to the rest of the world (Spain and Greece were their favorite comparisons). To suddenly have to come to terms with a huge budget deficit and Armageddon-style predictions for the economy, has a traumatic effect.
Lastly, and perhaps most importantly, the 2011 social justice demonstrations convinced many Israelis that they don’t necessarily have to accept reality as a given, and actually stand a real chance of reversing government decisions by rallying to the cause. The important achievements gained as a result of these demonstrations actually helped accentuate the inflated deficit, but also showed that politicians can be pressured into making concessions.
So venting out their frustrations, Israelis are now bemoaning the forthcoming sanctions. This does not mean we should expect wide-spread social unrest as in 2011. On the contrary, Lapid still has the very viable excuse of inheriting an already sick economy, and still enjoys a relatively high level of popularity. Never mind the outrage, there is also a common acceptance and understanding that drastic measures are necessary, and that the money to cover the huge deficit Israel now suffers from has to come from somewhere.
Netanyahu, and many believe this intentionally, has managed to place Lapid in a tough spot. He knew that this budget was going to be a very tough sell, and let’s not forget, the reason that the elections were held earlier than planned in the first place was his realization that his former coalition would not survive such a severe budget. So the 2013 budget, and by extension, the Israeli economy, were put on hold until the elections were over and Netanyahu formed his government. He now returns from his expensive trip to China as the responsible adult, publicly supporting his Finance Minister but also sweetening the pill by hinting at the possibility of canceling some of Lapid’s planned measures.
Of course, this political move can rebound should Lapid prove to be successful in getting the Israeli economy back on track. Indeed, Lapid should only be judged further down the road, and not after only a month and a half in one of the toughest positions in Israel. Lapid needs to stay the course and quickly learn from his mistakes.