Israel Update Week Ending July 1
Yair Lapid New Prime Minister, Knesset Disbands, Election Nov 1
ISRAELI GOVERNMENT
Israel has a new Prime Minister. As of midnight, Yair Lapid officially became interim Prime Minister of Israel. How long Lapid will hold this position remains unknown. Legally, Lapid will remain interim Prime Minister until a new government is formed, after the upcoming election — scheduled to take place on November 1. It has traditionally taken a few weeks of haggling for a new government to coalesce. However, last time it took three elections for the parties to reach an agreement to form a government. As a result, former Prime Minister Netanyahu was interim Prime Minister for two years.
The 24th Knesset came to an end on Thursday morning, after a late-night session on Wednesday night failed to resolve critical issues. The coalition tried to pass the “Metro Law,” which would have provided the legal basis to begin work on Israel’s most ambitious infrastructure project —the creation of a subway system to serve the Greater Tel Aviv Metropolitan area. But, sadly, the Likud refused to agree, asserting they would not give the coalition any “bragging rights”.
It should be noted, that the Likud did offer to pass the Metro bill, if the date for the new election was moved to October 25, i.e., a date they felt benefitted them, as it is before Yeshiva students return to their studies.
Likud spokespeople wrongly claimed the delay would be small, since “they plan to pass the law once they came back to power.” However, when a new government is formed it cannot pick up where the last government ended. They are required to bring laws up to a first vote again, and also, once again go through all the committees — That is without taking into account any objections the ultra-Orthodox (who may be part of the next coalition) might have. And the Bottom line is — Who knows when we will have a new government.
Another set of legislation the Knesset failed to pass were laws that would have allowed Israel to join the list of countries whose citizens do not require visas to enter the US. Once again, the Likud refused to allow these laws to pass, since the initiative would be extremely popular and would constitute an accomplishment for the outgoing government. US Ambassador Thomas Nides, who had worked diligently to get Israel into the program, took the unusual step of going to the Knesset and begging they pass the necessary laws (i.e., agreement to provide the US with limited access to the criminal database, as well as, notification to the US when an Israeli departs for America). Nides warned that not passing the legislation now would delay entrance into the automatic visiting Visa program by at least a year. Alas, the warning fell on deaf ears— my take on ILTV here.
A few smaller bills were passed, some quite important — including additional support for people with disabilities, strengthening protection for battered wives, a provision to throw out evidence collected illegally, strengthening the punishment for attacking minors, greatly lengthening the statute of limitation on childhood sexual assault, and giving legal status to bereaved siblings.
Because of the high holidays, this election cycle will be one of the most extended campaigns in Israel’s history (two months). Stage one will be for those parties with primaries to hold party elections and select their lists. On Thursday, Netanyahu’s single opponent in the Likud party already announced he would no longer challenge Netanyahu.
Once the party lists are elected or appointed, a period of jockeying will take place, during which they will see if any of the lists decide to merge. The most obvious candidates for merger are Labor and Meretz. Meretz is in poor shape after a Meretz MK was one of the immediate causes of the government’s downfall. Nitzan Hurwitz has made it clear he favors a merger, but Labor’s Meirav Michaeli is reluctant. In the end, that merger is inevitable, in my opinion.
The other big question is what will happen to the Yemina party, now that Former Prime Minister Bennett announced he would sit out the next election, and Ayelet Shaked would take the reins. A logical connection would be for Yemina and Gideon Sa’ar's New Hope Party to join forces.
Stay tuned over the next few weeks … In the meantime, you can read my requiem to the government, posted yesterday in Newsweek.
NATO AND IRAN
In a news conference at the NATO summit on Thursday, President Biden stated that one of the primary purposes of his upcoming trip to the Middle East — which will include stops in Israel and Saudi Arabia — is “to deepen Israel’s acceptance in the region”. This tallies with reports that an agreement is on the table that would allow Israeli airlines to fly over Saudi Arabia to points beyond.
Closer relations between Israel and Saudi Arabia are coming together in the shadow of a failed round of talks between the US and Iran on restoration of the JCPOA. I do not believe the agreement will be revived. As a result, Israel and the US will have to confront an Iran ever closer to possessing the bomb. The meeting this week between the Iranian President and Vladamir Putin is a clear giveaway. It is not in Russian interests for Iran to return to the agreement and avoid a confrontation with the West.
BDS
The BDS movement suffered a defeat, when Ben and Jerry’s parent company sold all of the rights to produce their ice cream to the Israeli distributor; who is now free to sell Ben and Jerry ice cream wherever he wishes.
BUSINESS
Elbit Systems continues its streak of significant sales, landing two big contracts from Asian countries just this past week. In one deal, valued at $548 million over four years, Elbit Systems will provide an integrated solution comprising of the ELBIT TIGER-XTM networking middleware; a TORCH-XTM based suite of airborne, land and ship-borne Command and Control applications; as well as advanced waveforms and a wide range of E-LynXTM Software Defined Radio (SDR) systems including airborne, vehicular, handheld, and shipborne configurations.
The program will include extensive co-development efforts and the transfer of know-how. These comprehensive combat networked capabilities are intended to improve operational effectiveness, decision making, and interoperability across all domains of operation, platforms, and systems.
In the second deal, Elbit received a contract to supply an Asian country with Lizard precision guidance kit for general-purpose airborne warheads. The Lizard is a laser-based precision guidance kit enabling general-purpose airborne warheads, of both Western and Eastern versions, to engage targets, including fast moving ones, with high accuracy. The contract is valued at $220 million over 14 months.
Konnecto, the prescriptive marketing platform pioneering the category of path-to-purchase optimization, announced it has secured $21 million in Series-A financing, led by PeakSpan Capital. In addition, existing investors TPY Capital, Mindset Ventures, Differential Ventures, SeedIL Ventures, and Magna Capital Partners also participated in the oversubscribed round, bringing the total capital raised by Konnecto to $29 million to date.