Israel Week Ending April 9th

Coalition negotiations, Netanyahu trial, Covid, economy and Yom Hashoah

POLITICS

Making sense of Israelis politics is always a challenge, but after four elections with no clear winner, this task has become much more complex. Attempts to understand what is political spin and what is real is a near-impossible task. What we do know is that President Rivlin, practically publicly hold his nose, when he granted Prime Minister Netanyahu the mandate to form a government. Rivlin stated he tapped Netanyahu, reluctantly — and solely because the law, as he interpreted it, required him to give the mandate to the candidate with the most Knesset member recommendations. 

For a brief period on Monday, it looked like a deal had been struck for Naftali Bennett to become Prime Minister, as part of the “coalition for change”. That deal fell apart when Bennett not only demanded to be Prime Minister first in a rotation with Yair Lapid, but insisted — with his seven seats — to be given an extra, tie-breaking vote so that he would control the government, (something Netanyahu did not even demand of Gantz). Lapid, who had reportedly turned down Bennett’s demand, went on TV Monday night to publicly state he had offered Bennett to serve as Prime Minister first, and publicly called on him to accept. 

Many Israelis went to sleep Monday night with the expectation there would be all-night negotiations between Lapid and Bennett, and that the two leaders would call on President Rivlin to delay his decision to give them more time to negotiate— something Rivlin indicated he would be open to during his consultation with the New Hope party. In the end, none of that happened, and Rivlin felt compelled to give the mandate to Netanyahu, who had more endorsees. Both New Hope led by Gideon Saar, and the two Arab-Israeli parties failed to endorse any candidate. Bennett’s Yamina party, with 7 votes endorsed Bennett. As a result, Netanyahu had 52, compared to 45 backers for Lapid.

But, what if Bennett’s performance was all theater? Bennet did not want to rush to agree to be in a government that included Labor and Meretz. Perhaps, Bennett acted to better position himself to agree to lead such a government, once the only alternative is a fifth election? From Bennet's perspective, that would make sense. Of course, if this was planned, it is a risky move. There is near-universal agreement that Netanyahu will not be able to square the circle, i.e., form a coalition that includes Bezalel Smotritch and Itamar Ben Gvir, and would be dependent upon the support of the Arab-Israeli Raam Party. Nevertheless, with so much on the line for Netanyahu, it would be a mistake to count him out.  

NETANYAHU TRIAL

The first three days of the testimony in Netanyahu's trial took place this week. The first witness for the prosecution was Ilan Yeshua, Director-General of Walla News. Yeshua testified to receiving repeated calls from Shaul and Iris Elovich, who controlled Bezeq/Walla, with demands Yeshua eliminate any negative coverage of Netanyahu, or his wife. Yeshua alleges the couple made clear it was in Bezeq's financial interest to keep Netanyahu happy, and that that included doing negative exposes on Naftali Bennett and Ayelet Shaked. Testimony in Netanyahu’s trial will resume next week.

FREEDOM OF SPEECH?

Five years ago, Meretz MK Yair Golan, then IDF Deputy Chief of Staff, gave a speech on Yom Hashoah that cost him his chance of becoming the Chief of Staff. In this speech, Golan cautioned he saw signs of fascism developing in Israeli society. Today, the Supreme Court ruled that Education Minister Yoav Galant could revoke issuance of the coveted “Pras Yisrael” (Israel Prize) for Math and Computer Science awarded to Oded Goldreich, from the Weizmann Institute, because Goldreich supported an academic boycott of Ariel University, located in the West Bank city of Ariel. In other words, the high court ruled that a largely academic prize can be withheld based on a recipient’s political views. The heads of all the Universities with the exception of Ariel and Bar Ilan wrote a strong letter to Galant stating that withholding the prize from Goldreich would represent an attack on freedom of speech and thought.

YOM HASHOAH

Yesterday was Yom Hashoah. I harbor mixed views on Israel's relationship to the Holocaust, however, that discussion is for a different day. Netanyahu opponents bitterly criticized the Prime Minister’s remarks at Yad Vashem the night before, for sounding too much like a campaign speech. Beyond his yearly warnings about Iran, Netanyahu spent much of the address speaking about vaccines, and how he obtained them. It was left up to President Rivlin to remind the crowd that 700 Holocaust survivors died from Covid-19 this past year.

I have spent much of the past six months working on a project to update our travel guide app on Jewish Poland, produced for Moreshet, six years ago. One of the many upgrades to the new version has been information added on hundreds of the small Shtetels throughout Poland, in which Jews lived before the war. While doing the work, I came across many gruesome photos of the Nazis at work exterminating our people. However, what I found most haunting was seeing thousands of pictures of ordinary people, on vacation, shopping, at a school play, or graduation, knowing that almost everyone in those photos would soon be slaughtered. The only pleasant images to look at were small celebrations wishing a family member good luck as he or she left for Israel.

At 10:00 yesterday, the sirens went off across Israel. For a change, I was standing on the street by a large intersection, with a scooter. It was profoundly moving to watch every car come to a halt, as everyone got out and stood at attention, as the nation spent a collective moment in memory. Next week sirens go off again, to mark the heavy price we have paid to ensure that a Holocaust never happens to the Jewish people again.

COVID

Last week, I hoped I would not have to lead with Covid-19 news again. I am happy to report that is indeed the case. The numbers of new infections remain low and continue to decrease. Israel had a total of 209 new Covid-19 cases on Thursday, with a positive test rate of .5%. We are now down to 276 people in serious condition, in all our hospitals, and the entire economy has opened up. The streets are packed, the restaurants full, and there is hope that between the vaccines (which have now been administered to nearly 60% of the population), and those who have recovered from Covid-19, we may be reaching herd immunity.  

DEFENSE

A spy/logistics ship of the Iranian Revolutionary Guard was attacked in the Red Sea. The attack has been widely attributed to Israel. While the government has not taken official responsibility for the attack, it has allowed speculation that perhaps it had been an Israeli attack to continue unabated. This is part of what seems to be a Naval war of attrition between Israel and the Iranians; a dangerous game for both sides. While the Israel Navy is smaller than its Iranian counterpart, it is considerably more lethal.

ECONOMY 

Not long ago, the idea that major Cloud-service providers might open data centers in Israel seemed far-fetched. But it now appears that Microsoft, AWS, and Google all plan to open data centers in the country. Google has begun advertising jobs for data center engineers, expecting it is likely to win a major government contract for Cloud Services. All of the companies, in addition to Facebook, Apple, IBM, and Intel, currently design microprocessors in Israel.

On Wednesday this week, over $1 billion in new funding was announced. Retail Analytics Trax Image Recognition raised 640 million, and Redis Labs raised $310 million. White Source raised $75 million, and Blue dot raised $32 million. The next day, on Thursday, Cellebrite, a digital intelligence company, announced it would go public, via a merger with a SPAC (the latest financial rage — a “Special Purpose Acquisition Company,” i.e. a public shell company created to raise money for a later acquisition), with an estimated valuation of $2.4 billion. 

As I have written before, the Israeli tech sector is on fire. With Covid essentially over in Tel Aviv, home to a high percentage of Israeli tech firms, residents seem to be partying like there is no tomorrow. Restaurants and bars that were shuttered until a few weeks ago are now packed with people, as they celebrate a return to life with the built-up savings they have accumulated over the course of the past year.