Netanyahu Proposes Early September Elections in Israel

Israeli Prime Minister Benjamin Netanyahu proposed holding early elections on Sept. 4, saying he needs to form a new government because of differences between the parties in his coalition.

The Knesset, Israel’s 120-seat parliament, today started debating a bill submitted by Netanyahu’s Cabinet that would set the election more than a year earlier than required by law, Knesset spokesman Yotam Yakir said by telephone.

“I would have been very happy had we been able to complete the full term,” Netanyahu told Cabinet members at a meeting in Jerusalem, according to a text message from his office. “Unfortunately, this instability put a question mark on that goal so it seems to me the best option is to set up a short campaign” and “form the widest possible government.”

Netanyahu, 62, enjoys a lead over his rivals though he will still need coalition partners, according to polls published over the last few days. His Likud party would win 31 of the 120 seats in parliament, ahead of the second-placed Labor party with 18, according to a poll published in the Maariv newspaper on May 3.

Settlement Setback

He suffered a political setback today when Israel’s High Court of Justice ordered the destruction of five apartment houses in the West Bank Jewish settlement of Beit-El, criticizing the administration for trying to stop demolition orders. The Jerusalem-based court said in a decision on its website that the homes in Beit-El’s Ulpana section were built on Palestinian-owned land and must be demolished by July 1.

Netanyahu had asked Attorney-General Yehuda Weinstein to find a legal way to avoid demolition of the Ulpana site. “The principle that has guided me is to strengthen Jewish communities in Judea and Samaria,” the prime minister said in an April 4 statement, using the biblical names for the area comprising the West Bank.

The premier kicked off his re-election campaign last night with a speech that highlighted his economic and security achievements.

“We returned the economy of Israel to robust growth, more robust than Europe and the United States,” Netanyahu told members of Likud in Tel Aviv. “At a time when unemployment has reached drastic dimensions in many countries, we created a quarter-million new jobs.”

Growth Advantage

The Israeli economy grew 4.8 percent in 2011 and is expected to expand 3.1 percent this year, in comparison with growth last year in Europe of 1.4 percent and the U.S. of 1.7 percent.

A short campaign that leads to a September vote may be good news for investors, according to Boaz Schwartz, Deutsche Bank AG’s country manager in Israel.

“Normally in Israel the pre-election period is very lengthy, where there is a lot of uncertainty and demands on the budget,” Schwartz said at a Bloomberg panel discussion in Tel Aviv yesterday before the speech. “The fact that it will be only four months before elections with the summer in the middle is positive.”

Netanyahu will campaign “on the fact that we have the lowest unemployment in three decades and one of the highest growth rates in the Western world,” said Avraham Diskin, professor of political science at the Hebrew University of Jerusalem. Israeli unemployment was 6.9 percent in March, compared with 8.2 percent in the U.S.

Opposition’s Case

Challengers from Labor, Kadima and other parties will cite income inequality and the relatively high cost of housing, Diskin said. Those issues will be especially prominent if this summer sees a repeat of last year’s social justice protests in Tel Aviv and other cities, he said

The decision to call early elections was hastened by disagreements within Netanyahu’s coalition over the budget and military draft exemptions for ultra-Orthodox Jews, said Zalman Shoval, a former Israeli ambassador to the U.S. who advises Netanyahu on politics and foreign policy.

“From Netanyahu’s point of view, riding high in the public opinion polls and not really having a serious opposition to his probable re-election, this is as good a time as any,” Shoval said. “This will send a message to Israel’s friends, and its enemies, that they will have to deal with the same prime minister for the next four years, and they should be prepared for that.”

Netanyahu said his government has been “strong and judicious” in its handling of diplomatic and security challenges, including success in “enlisting the international community against Iran’s nuclear program.”

First elected premier in 1996, Netanyahu lost the next election in 1999 to Labor’s Ehud Barak -- now defense minister and head of the Atzmaut party. He returned to office in 2009 by bringing five other parties into a coalition, even though Likud had one less seat than Kadima, its main rival in that vote.

No Israeli party has achieved a parliamentary majority, meaning that elections lead to negotiations in which the winner must work with smaller parties.

To contact the reporters on this story: Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net; 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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