Bloomberg News

Netanyahu’s Coalition Takes Shape With Lapid, Bennett Deals

March 10, 2013

Israeli Prime Minister Benjamin Netanyahu

Israeli Prime Minister Benjamin Netanyahu chairs the weekly cabinet meeting at his Jerusalem office. Photographer: Sebastian Scheiner/Pool/Getty Images

Israeli Prime Minister Benjamin Netanyahu convened the current Cabinet for what he called its final meeting in Jerusalem today as talks to form a new ruling coalition advanced to their final stage.

A major stumbling block to forming a ruling coalition was overcome when Yair Lapid, leader of the second-biggest party, Yesh Atid, agreed to become the next finance minister.

“It’s no secret he was interested in the foreign ministry, I don’t deny that, but he got the finance ministry,” Yesh Atid parliament member Yael German told Army Radio today. Disagreements over remaining Cabinet posts are expected to be resolved within the next few days, German said.

Stocks rose on reports of an impending coalition deal. Netanyahu, whose Likud party emerged from January elections with the most parliamentary seats, has until March 16 to form a new government ahead of a scheduled visit by U.S. President Barack Obama later this month.

At today’s weekly Cabinet meeting, he suggested coalition talks had reached gone into a last stretch.

“Apparently, this will be this Cabinet’s last meeting,” Netanyahu told his government in Jerusalem, according to a text message from his office. The next government will have to focus on reducing Israel’s cost of living, address the military draft exemptions for ultra-Orthodox Jews that many in Israel oppose, and contend with regional security threats, he said.

TA-25 Index

The TA-25 index gained 0.9 percent in Tel Aviv trading today at 4:28 p.m.

“The market is optimistic following nearly two months of uncertainty since the elections about what form the government would take,” Zach Herzog, head of international sales at Psagot Investment House Ltd. in Tel Aviv, said by phone today.

Final coalition agreements will probably be reached by Tuesday, former foreign minister Avigdor Liberman said today. “It may take one more day after that to formulate all of the necessary understandings,” Liberman said in comments broadcast on Army Radio.

Netanyahu has said he is holding the foreign ministry post forLiberman, pending the outcome of legal proceedings against the leader of the Yisrael Beitenu faction. Liberman resigned as foreign minister in December after being indicted on fraud and breach of trust charges. He remains in parliament and has been involved in the coalition talks.

Likud Party

Netanyahu’s Likud party, running jointly in Jan. 22 elections with Yisrael Beitenu, won 31 seats in Israel’s 120- seat parliament, the Knesset, trailed by Yesh Atid with 19.

The third biggest party in the next government will be the Jewish Home faction, which won 12 seats. Jewish Home leader Naftali Bennett is slated to serve as minister of industry, trade and labor, Haaretz said today, citing unidentified party officials.

Yesh Atid, which campaigned primarily as a champion of middle-class concerns, favors advancing peace talks with the Palestinians toward a two-state solution. Jewish Homes opposes any Palestinian state and supports increasing West Bank settlements.

Netanyahu has also signed a coalition agreement with the six-seat Hatenuah faction, whose leader, former foreign minister Tzipi Livni, will be appointed justice minister.

Sitting in opposition to the government will be two ultra- Orthodox parties, Shas and United Torah Judaism, which would not agree to demands to limit draft exemptions for young men studying in religious seminaries. It will be the first time in a decade that the ultra-Orthodox parties are not included in the coalition.

To contact the reporter on this story: Calev Ben-David in Jerusalem at cbendavid@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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