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Netanyahu Calls for Early Israeli Elections Amid Budget

Israeli Prime Minister Benjamin Netanyahu called for early national elections amid a coalition impasse over next year’s budget as polls showed him as the leading candidate to form a new government.

“I have decided that the best interests of Israel obligate us to go to elections now and as quickly as possible,” Netanyahu said today in a televised address. “The people of Israel prefer a short election campaign of three months instead of a long campaign period of a whole year.”

Netanyahu has been meeting this week with members of his coalition in an effort to reach an agreement on the 2013 budget. He has been calling for deep cuts to stay within the targeted deficit and was facing opposition from coalition members who are reluctant to reduce spending. A vote must be held no later than a year from now.

“Netanyahu sees that the polls are in his favor right now, and if he’s having trouble with the budget this would be the best time for elections rather than waiting another year,” said Mark Heller, senior research fellow at Tel Aviv University’s Institute for National Security Studies.

According to a poll published by the Haaretz daily on Sept. 28, Netanyahu’s Likud party would win 28 seats in the 120-seat Knesset, one more than it currently holds, making it the largest faction in parliament. The survey also showed 35 percent of Israelis see him as “most suited” to lead, almost double the 16 percent of his nearest contender for the premiership, Shelly Yacimovich of the opposition Labor party.

Budget Cuts

Israel must cut next year’s budget by about 17 billion shekels ($4.4 billion) to stay within fiscal limits as it faces a possible deepening of the European financial crisis, Bank of Israel Governor Stanley Fischer said in August. The government deficit was 4.1 percent of gross domestic product in the months through August, more than double the original target for 2012, the Finance Ministry said on Sept. 4.

The government already has approved higher taxes beginning in 2013 to help meet next year’s revised deficit target of 3 percent of GDP.

Early elections would come amid rising tension between Israel and Iran over the Islamic Republic’s nuclear program. Netanyahu said at the United Nations on Sept. 27 that “by next spring, at most next summer,” Iran will be in the final stage of having enough enriched uranium to make a nuclear weapon. Israeli leaders have said that “all options are on the table” to prevent that from happening, including a military strike.

“I wouldn’t link Netanyahu calling early elections to any decision on Iran,” Heller said. “I don’t think he’s looking at the military option right now. If he was then holding elections also wouldn’t prevent that.”

To contact the reporters on this story: Gwen Ackerman in Jerusalem at gackerman@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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