Secret Netanyahu-Herzog deal for Lik-Lab government coalition after March vote

The Israeli government has traditionally been headed by one of the two rival mainstream blocs, the right-of-center Likud or the left-of-center Labor, excepting for unity governments in times of crisis and one case of a rotating premiership. Neither bloc has ever achieved a majority for forming a cabinet without a cluster of small factions.

This time may be different, debkafile’s political sources report. The opinion samplings taken privately by party strategists indicate a close run in the March 17 general election between Binyamin Netanyahu’s Lilkud and Yitzhak Herzog’s opposition Labor, since he formed a partnership with Tzipi Livni and her small Hatnuah. , Likud stays marginally ahead with 23-24 (out of 120) Knesset seats compared with Labor’s 20-22.
Instead of engaging in the excruciating, separate horse-trading for a government coalition after the elections with a bunch of small factions, Netanyahu and Herzog appear to have found common ground on the broad lines of a power-sharing partnership.

Most significantly, this partnership would enable them to disempower Naftali Bennett’s hard-line Jewish Home (16-17), Avigdor Lieberman’s Yisrael Beitenu (sinking to 7-10), Kahlon’s new Kulanu (8-9) and Yair Lapid’s Future (plunging to 6-7). It would also reduce the bargaining power of the ultra-religious bloc.
Netanyahu has avowed an ambition to reduce Israel’s fragmented political scene to major blocs.

The backdoor negotiations between the prime minister and opposition leader are not face-to-face, but through a mutually trusted go-between, revealed here by debkafile as the Labor leader’s brother, Brig.-Gen (res.) Michael Herzog.

In the early 2000s, Mike Herzog was head of the strategic section of the IDF’s Planning Division. His career included service as aide de camp of Shaul Mofaz, then defense minister, and chief of staff of another defense minister, ex-leader of Labor Ehud Barak, who was later prime minister.

From May 2009 to March 2010, M. Herzog acted as special envoy in the efforts of Prime Minister Netanyahu and Defense Minister Barak to resuscitate peace negotiations with the Palestinians. The prime minister also attached him to his personal envoy Yitzak Molcho with the US team that held talks with Syria from December 2010 until the onset of the civil war in March 2011.
The Labor leader’s brother is currently a fellow of two American think tanks, The Jewish People Policy Institute and the Washington Institute for Near East Policy, through which most of Israel’s top intelligence and security officials have passed at some time. He is therefore a familiar figure in the circles that count in the American and Israel capitals.

Towards the end of last year, Netanyahu, who was then building up to calling a snap election, again added Mike Herzog as a secret envoy to Molcho’s quiet contacts with the Americans and Palestinians. He was also involved in diplomacy on behalf of the prime minister on other strategic matters, including the Iranian nuclear issue.

In the last couple of weeks, Mike Herzog has redoubled his efforts to build a bridge between his brother and the Likud leader and made headway in three spheres:

1.  In the last week of December, Netanyahu and Yitzhak Herzog launched a rare joint initiative to recall the Knesset for legislation to raise the minimum wage in the public and private sectors.
2.  The two leaders have stopped trading personal abuse. Livni keeps up a shrill offensive against Netanyahu and the Likud slate elected in the party primary this week. The circles around them comment: “She’ll soon catch on.”

3.  The prime minister accepted the new Labor joiner, the respected economist Prof Manuel Trachtenberg, 64, as finance minister in the new post-election government.  Born in Argentina, the professor has a PhD in economics from Harvard and specializes in technological innovations. While a strong free market advocate, he opposes cartels and monopolies. In 2011, the government put him in charge of a team for resolving growing social unrest over income gaps and he proved receptive to protesters.
The Likud slate elected in this week’s primary dropped the two most outspoken hardliners and will present the voter with relative moderates of the right-of-center, roughly positioned for their future portfolios in a potential unity government.

The steps taken so far in the direction of this partnership are tentative and preliminary. There are still hurdles to overcome, including, primarily, the outcome of the election – which party comes out first and by how many votes. Likud is holding steady in the lead thus far but still, Netanyahu’s loyalists may be required to sacrifice top ministries for the sake of unity with Labor.
And so claims by Naftali Bennett of the defense ministry, Israeli Katz, of finance and Miri Regev (Netanyahu’s only critic in the top five of the Likud slate) of housing are premature.

A tie between the two blocs could force acceptance of a deal to rotate the premiership between their leaders – two years each. Then the negotiations would come down to who goes first.

But for the volatile Middle East and turbulent Israeli party politics, ten weeks is enough to turn all these processes on their heads. 

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