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Netanyahu Plots Comeback Even Before New Government Sworn In

Bloomberg logo Bloomberg 6/14/2021 Yaacov Benmeleh

(Bloomberg) -- Benjamin Netanyahu, unseated after a bruising, two-year battle to hold on to his job, is already plotting a comeback.

The once-invincible Israeli leader was voted out of office on Sunday after 12 uninterrupted years in power, replaced by a shaky governing alliance beset by deep internal divisions.

When Netanyahu addressed parliament in his waning moments as prime minister, there were no pro forma well wishes for his successor, religious Jewish nationalist Naftali Bennett, but rather a pointed warning, delivered in his U.S-accented English: “We’ll be back -- soon.”

Netanyahu’s Refusal to Cede Power Made Others Try to Wrest It

“If we’re destined to be in the opposition, we will do it with our heads held high until we topple this dangerous government and return to lead the country in our way,” he said in a speech preceding parliament’s vote of confidence in the new government.

a man wearing a suit and tie: Swearing in of New Israeli Government at Knesset © Bloomberg Swearing in of New Israeli Government at Knesset

Benjamin Netanyahu at the Knesset in Jerusalem, Israel on June 13.

Photographer: Kobi Wolf/Bloomberg

The new coalition will govern with the slimmest majorities -- commanding 61 of parliament’s 120 seats -- and runs the gamut of Israeli politics: secular and religious factions, hawks and doves, free marketeers and social democrats, and an Arab party for the first time in Israeli history.

Survival could prove a challenge, given the conflicting ideologies. At the same time, the alliance coalesced around a desire to oust Netanyahu, who’s standing trial on corruption charges -- and that might prove to be the glue that holds it together to block any comeback bid he might make.

The coalition must steer away from issues that divide it and concentrate instead on matters where they can find consensus, such as upgrading infrastructure, and investing in the health system and Israeli Arab communities, said Gideon Rahat, a senior fellow at the Israeli Democracy Institute research center in Jerusalem.

Naftali Bennett wearing a suit and tie: Swearing in of New Israeli Government at Knesset © Bloomberg Swearing in of New Israeli Government at Knesset

Naftali Bennett speaks at the Knesset in Jerusalem, Israel on June 13.

Photographer: Kobi Wolf/Bloomberg

“They have to concentrate on the things that unite them and continue to feel that Netanyahu is out there waiting for their failure,” Rahat told Bloomberg TV on Monday.

One of the things the coalition has pledged to do is to immediately pursue is a term-limit law to ensure another run like Netanyahu’s never happens again. In all, Israel’s longest-serving prime minister governed for 15 years, including a three-year stint in the late 1990s.

Netanyahu, 71, possesses an especially strong incentive to try to get back to the prime minister’s office. A return to power gives him the chance to suspend his graft trial by passing legislation shielding a sitting leader from prosecution.

He’s accused of illicitly accepting gifts from billionaire friends and trying to win sympathetic press coverage by shaping regulation to benefit media moguls -- charges he denies.

The Economy Israel’s Post-Netanyahu Government Stands to Inherit

Goldman Sachs International economists noted the potential for political instability inherent in the new coalition but said the impact on Israeli asset prices “remains limited” because strong foreign investment has “reduced the economy’s sensitivity to political developments in the region.”

Under a power-sharing agreement that allowed the new government to get off the ground, Bennett, a 49-year-old former Netanyahu ally, will serve until August 2023. He’ll be replaced by centrist Yair Lapid, who was the main architect of this unlikely coalition and will lead the country through November 2025.

Unlikely Alliance Forms Israeli Government to Oust Netanyahu

U.S. President Joe Biden congratulated Bennett and Lapid on their new government just minutes after it was ratified, and like other world leaders expressed interest in advancing regional peace efforts. On Monday, Lapid -- who is currently serving as foreign minister -- said Israel will work to repair ties with Biden’s Democratic party, which suffered under the pro-Republican Netanyahu.

“The outgoing government took a terrible gamble, reckless and dangerous, to focus exclusively on the Republican party and abandon Israel’s bipartisan standing,” he said. “The Republicans are important to us, their friendship is important to us, but not only the friendship of the Republican party.”

At the handover ceremony at the Foreign Ministry, Lapid also called world powers’ 2015 nuclear accord with Iran “a bad agreement” and said Israel will “prevent Iran from attaining a nuclear bomb in every way possible.”

Still, he said, Israel could have had more influence had it conducted itself differently, in an apparent reference to Netanyahu’s head-to-head confrontation with former President Barack Obama over the pact his administration brokered. World powers and Iran are currently trying to revive the deal, which unraveled after former President Donald Trump withdrew three years ago.

On Sunday, Bennett said resuming the pact would be a mistake and that Israel would retain “complete freedom of action” on Iran.

(Updates with Lapid comments starting in 14th paragraph)

More stories like this are available on bloomberg.com

©2021 Bloomberg L.P.

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