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Less than a year ago, “King Bibi”, as the Israeli Prime Minister Benjamin Netanyahu had become known, had an almost absolute majority in the polls and all other parties, one after another, were entering into crisis. The recent elections show a very different picture: polarization to the right and the left.

In May of last year Times wrote:  “Netanyahu is poised to become the longest-serving Israeli Prime Minister since David Ben-Gurion, the founding father of Israel. He has no national rival. His approval rating, roughly 50%, is at an all-time high. At a moment when incumbents around the world are being shunted aside, he is triumphant. With his bullet-proof majority, he has a chance to turn himself into the historic figure he has always yearned to be. He has become, as some commentators have dubbed him, the King of Israel.”

The elections to the Knesset (Israeli Parliament), which took place last week, completely overturned that picture and, in the words of the Financial Times, they “clipped the wings of the eagle.” With a historically high 66% participation rate, Mr. Netanyahu’s party still managed to come in as the largest group in the Knesset, but it emerged severely weakened.

Netanyahu’s party, Likud, had strategically chosen to merge its list with that of right-wing demagogue and former foreign minister Avigdor Lieberman and his Yisrael Beiteinu (Israel Our Home) party. But the two parties, who before the elections had 42 seats (27 for Likud, 15 for Yisrael Beiteinu) between them, ended up getting only a total of 31 seats in the new Knesset. Of these 31, only two-thirds are under the control of Netanyahu, which means that the lead his party has against the other parties is now very narrow.

Before the elections all attention in the international and Israeli media had been on the far-right Jewish Home party of Naftali Bennett. What the clever commentators of the bourgeois and their equally clever friends on the international left had anticipated was a massive right wing shift in the elections with Jewish Home becoming the second largest party in the 120 member Knesset, but they paid far less attention to what was happening on the left.

The Labor Party, which had also been a part of Netanyahu’s government in recent years, came third with 15 (up from 13), which was lower than the 20 seats they had been expecting to get.

However, the real big winner of the elections was the new populist party of Yesh Atid who entered the Knesset as the second largest party with 19 seats. Equally impressive was the performance of the most left-wing party in the Knesset, the strongly secular Meretz party.

In fact, all talk about the electorate swinging to the right proved wrong. Although the Jewish Home party boosted its Knesset representation nearly fourfold, the parties of the right (Likud-Beiteinu and Jewish Home) now have four fewer seats than their predecessors in the previous Knesset, whereas the centre-left parties (Yesh Atid, Labor, Hatnua, Meretz, and Kadima) grew overall by three seats.

In fact, it was only at the last minute that the parties of the right-wing camp (Likud-Beitenu, Jewish Home and the two main ultra-Orthodox parties) won the majority in the Knesset with the smallest margin possible. For that they can thank the armed forces whose votes came in last, taking the Jewish Home from 11 to 12 seats and The United Arab List, from five to four.

But even in the armed forces, the right wing is beginning to feel the pressure. This group that would normally vote significantly to the right of the rest of the electorate reflected the same leftward shift as in the rest of society. In fact, amongst the Israeli Defence Forces soldiers, Yesh Atid got 2.2 percent more than in its national vote, Labour was just one percent down and Hatnuah and Meretz each 0.7 lower than their share of the general vote.

There is a Future

The biggest surprise of the elections was the new party Yesh Atid which was led by ex-TV presenter Yair Lapid. With 19 seats, the party received almost three times as many parliamentary seats as opinion polls had projected. Although the bourgeois media has praised Yair Lapid for his charisma and clever Facebook campaigns, there was something else behind his popularity.

As opposed to what is the norm in Israeli parliamentary politics, Yesh Atid (meaning There is a Future) based their campaign on the question of social equality, poverty, house prices, and the like. Not long ago, Yair Lapid wrote a column under a title that became his catchphrase: “Where’s the money?”, in which he wrote: “This is the big question asked by Israel’s middle class, the same sector on whose behalf I am going into politics. Where’s the money? Why is it that the productive sector, which pays taxes, fulfils its obligations, performs reserve duty and carries the entire country on its back, doesn’t see the money?”

His main demands were for better public education and an end to rising taxes and for affordable housing. The party also waged a campaign for an end to automatic military exemption for thousands of ultra-Orthodox students who are allowed full-time Torah study. These were the demands that struck a chord with a large layer of Israeli workers and youth who have been feeling increasing pressure on their living standards.

The average Israeli salary is about $2,500 per month while most public workers receive far less. But rent for a modest three bedroom apartment in central Jerusalem can cost upwards of $1,500 per month. The buying of an apartment anywhere near the large cities is completely out of the question for the vast majority of young people.

Furthermore, around 20% of the population lives below the poverty line. Especially pensioners live life in deep poverty. According to studies, around a quarter of Holocaust survivors in Israel live below the poverty line, struggling to pay for food, heating, housing, medication, and care. Indeed for the workers and poor, the “dream” of a Jewish homeland has become a nightmare.

In 2011, these underlying tensions found an expression in the largest mass movement the country has ever known. Over the course of several months a movement on the streets of the major cities staged some of the largest demonstrations in Israeli history. Several massive demonstrations between of 300,000 and 500,000 people took to the streets of this small country with 7-million inhabitants.

But because of lack of leadership and perspective for the movement it soon died down. Seeing that the path of direct action seemed to have failed, the masses moved on to the political stage and the left shift in the elections is exactly a reflection of this fact.

Ehud Barak who served as minister of defence in Netahyahu’s cabinet acknowledged this himself. “The people who went in hundreds of thousands to the streets were basically ignored by the government that I am a part of,” Barak told CNN while attending the World Economic Forum in Davos, Switzerland. “They came to the ballots to say, for us, we want our share of what happens in Israel. It was a kind of telling the government, ‘there is a limit to what you can expect of us’.”

The Left and the left of the left

On the left, the Meretz party doubled its MPs from three to six. This is significant as Meretz is seen as a far-left party by the Israeli masses. As a commentator of Al Moniter said, “Were it not for the 19 Knesset seats of Yesh Atid, the left-wing party Meretz would have been crowned as the surprise of the elections.” During the elections Meretz had waged a campaign further to the left than in the past, placing itself to the left of all the major parties on all major questions. And this was no accident.

The Foreign Affairs Journal wrote, “Going into these elections, Meretz, the largest of the parties running to the left of Labor, commissioned several opinion polls in order to help it plan its campaign strategy. According to Zahava Gal-On, the chair of the party, the results were surprising: Almost 20 percent of Israeli Jews identified as leftists — well above the left’s current representation in the Knesset. Meretz, which won only three seats in the previous elections, decided to reclaim the “left” label and run on a platform that reflects it. The party advocates an immediate recognition of a Palestinian state and a negotiated withdrawal from the West Bank. In the height of the election season, the party broke the most basic rule of Israeli politics — unconditional support for Israel’s military operations — and opposed Operation Pillar of Defense in Gaza. Meretz is hardly poised to play a big role in the next Knesset, but its bold strategy has placed it on track to nearly double its current representation.”

In the case of the elderly for instance, Meretz placed itself to the left of all the other major parties by demanding that, in the absence of additional income, individual pension allowances should be at the level of the minimum wage. It was also in favour of free or very cheap large-scale day care nursing centres and the minimizing of the financial participation of families in caring for the elderly. On holocaust survivors, Meretz also went furthest by proposing a law guaranteeing the rights of survivors.

The same trend of leaning to the left, albeit in a milder version, was also seen in the Labor Party, which was trying to capitalize on the movement of 2011. It focussed its campaign on criticizing Netanyahu’s “neo-liberal” economic policies, which they say have worsened inequality.

At the same time, a new generation of left-wing candidates emerged within the Labor Party, among them several notable journalists and two leaders of the 2011 protests, Stav Shaffir and Itzik Shmuli. Like Meretz, Labor tried to capitalized on the social tensions in society, but it performed quite poorly, more than anything because it had, until 2011, itself been a part of the right-wing coalition that had ruled along with Netanyahu.

The Fall of the King

Netanyahu himself has been reduced to a pathetic haggler desperate to hold on to power. Immediately after the elections this stern right-winger held “a long and earnest talk’”with Yesh Atid chairman of Yair Lapid, about forming a coalition government. Both men have now said they intend to join together in government.

No matter what, Netanyahu is seriously weakened. He had thought that his bloody bombing campaign of Gaza at the end of last year would create a patriotic and chauvinistic mood that would give him a comfortable lead in the elections. It was clear that his whole campaign, with the slogan, “A strong leader for a strong nation,” was based on this presumption. Unfortunately for Netanyahu, the campaign had the exact opposite effect. In fact all, anti-IDF slogans, which were put forward by especially Yesh Atid and Meretz, had wide popularity.

On top of this, his government was also weakened by several corruption scandals that hit his coalition, the most noticeable one being the case against his former main coalition partner and former leader of the Yisrael Beiteinu, Avigdor Lieberman. In recent days a new case has also surfaced where Ethiopian women had, secretly and without their own knowledge, been injected with contraceptives. This case goes all the way up to Netanyahu’s office and further damaged his reputation.

The new government will therefore be fragile and unstable. If Netanyahu chooses to form a coalition only with the right-wing parties, he will have a very narrow majority. If he opts for a national unity government, which is most likely, he will be uniting forces that represent very different social layers. This will be similar to when he shared power with the Labor party on the one side and Lieberman’s party on the other. In the end the Labor party was forced to leave government in the wake of the 2011 movement. But this time round it is far from sure that Netanyahu would survive a similar break-up of the government.

The first test of his new government, whichever coalition Netanyahu succeeds in forming, will be the passing of the new budget which last year had a deficit of 4.2 percent of gross domestic product, double the original estimate.

In general the economic prospects are not looking bright. Israel’s economy expanded more slowly than previously estimated last year, as growth of exports and fixed investment stagnated. Gross domestic product increased 3.3 percent on a year ago. The figure compares with a previous forecast of 3.5 percent. In the third quarter, the economy expanded on an annualized basis by 2.8 percent, the slowest in three years.

GDP per capita only rose 1.5 percent in 2012, to 117,600 shekels ($30,500). Last year, GDP per capita increased 2.7 percent. This general slowing of the economy has led to shortfall in tax income of nearly 14-billion shekel ($3.75-billion). Indeed, the government had a 39-billion shekel ($10.5-billion) hole in its budget last year, despite spending cuts and tax rises, and will need to take more such measures in 2013.

Last year, parliament approved a series of tax increases – including on income – for 2012 and 2013 and budget cuts that aimed to boost the state coffers by more than 14 billion shekels. But while this served to further undermine living standards of the workers, the poor and the youth, it did not fix any of the economic problems that the country is facing. In fact, similarly tough measures were taken in 2003 and 2009 with the only results being the further deterioration of the living standards of the masses.

Now Israel has the second highest poverty rate in the developed world, with nearly 25 percent living below the poverty line, and is second only to Mexico in terms of social inequality. A report last November by Israel’s National Insurance Institute showed that 1.8-million of Israel’s 7.8-million people live below the poverty line. In 2011, more than 36 percent of Israeli children were poor, a jump of 1 percentage point from the previous year. Poverty afflicts more than 400,000 Israeli families, including almost 7 percent of families with two working people.

In spite of all this, according to the bourgeois media the new parliament will need to further cut spending by 14-15-billion shekels (some $4-billion), or about four percent, and also raise taxes by as much as 5-billion shekels to keep the deficit to 3.5 percent of gross domestic product. Thus the situation for the masses can only get worse.

These were the very same conditions that were at the base of the protest movement of 2011. The elections last week were a continuation of the process of polarization that we started witnessing then. But like the revolutionary movements of the Arab world, the movement in Israel is going through a period of maturing. The movement is realizing that street protests alone are not enough and that a prolonged political struggle is needed.

Having failed to change anything on the streets, the masses have turned to the electoral front. This has produced a shift both to the left and the right, as the masses look for alternatives to Netanyahu. In spite of everything, what they will now get is yet another Netanyahu-led government. However, his authority has been much weakened. He will proceed to carry out further cuts in social spending, pushing more and more layers into poverty.

All this will sharpen even further the social and political polarization we have observed so far. In this context, the ideas of socialism will gain a growing echo. What is required in Israel is a party on the left capable of gathering around itself all this growing social discontent.