Israel: Likud-led bloc might eventually garner majority to establish government

• Probability for political stalemate to remain still overall high
• Remaining of Netanyahu in politics is obstacle to formation of rightist government even if electorate is mostly right-wing leaning
• Only Habayit Hayehudi from ruling parties willing to join Netanyahu but it most likely won't enter Knesset
• Only chance of anti-Netanyahu bloc to rule again is to get support from Hadash, Ta'al
• Parties overall have similar ideas on economic issues safe for funding for ultra-Orthodox
• Differences regarding Palestinian issue become more explicit

Following a year of fragile political stability, Israel will hold its fifth elections since the start of 2019 on Nov 1. Nothing much has changed in the past three years with prevailing voting preferences for rightist parties persisting as well as the inability of those parties to create a government. Former PM Benjamin Netanyahu, the leader of the rightist Likud, which is also the largest party in the Knesset and according to polls, remains the major hurdle because of his corruption cases. Nevertheless, he continues to lead massively in all PM preference surveys and his party, the Likud remains the one with higher chances of reaching majority and establishing a government. The parties comprising the current ruling coalition have recorded losses in polls compared to their current Knesset representation and are far from garnering support for a majority. Even if they manage to raise enough support, a re-union is rather unlikely as they have proved that uniting on an anti-Netanyahu platform only is insufficient to bridge their opposing ideas on some of the major issues standing before the country.

MAJOR POST-ELECTION ISSUES

Now that the economy has more than fully recovered from the pandemic-induced crisis and the labour market has started showing signs of overheating again, the long-standing issue with the high cost of living has started re-emerging. Another important problem is the surge in housing prices deriving from the apparent lack of enough apartments. Those issues were on the agenda of the outgoing government but also among the major announced goals of the last few Netanyahu-led cabinets.

External policy issues comprise the long-standing issue of reaching peace with the Palestinians, any potential return of the US to the nuclear deal with Iran, and establishing official ties with more Arab countries. There is consensus among political parties all over the political spectrum on the latter two. However, there are deep differences regarding the Palestinian issue from supporting a two-state solution among leftist and centrist parties to outright opposition to that idea among rightist parties. PM Tair Lapid (Yesh Atid) recently spoke about his support for a two-state solution, which provoked fierce rejection on the part of Netanyahu, who has been keeping private his position on the issue in the past several years. Some of the parties in the ruling coalition are also against the creation of a Palestinian state so the prospects for renewing the peace process are close to zero no matter which bloc will gain the power after the elections.

MAJOR PARTICIPANTS IN THE ELECTION

The number of parties and formations with approved lists of candidates is 40 (1 more than the 39 lists in the 2021 elections). Voting preference polls predict that up to 12 can enter the Knesset. They are overall grouped in two major blocs plus the Arab list comprising Hadash and Ta'al, which has already said it would not support either bloc. The bloc led by the largest party Likud has higher support and comprises the two ultra-Orthodox parties Shas and United Torah Judaism and the Religious Zionism Party. The other bloc comprises parties all across the political spectrum but most are predominantly with centrist or leftist affiliation. They are united around the idea to unseat Netanyahu so they are called the anti-Netanyahu bloc. They managed to form a short-lived government after the previous elections last year, which proved very unstable to continue ruling for more than a year.

According to the Israel Democracy Institute, the Israeli voters have predominantly rightist views. Indeed, opinion polls also indicate that the voters prefer parties of rightist views. However, the rightist parties can not sit together in a government as the unions between them are not about ideological issues but are rather still driven by personal conflicts. This has been an issue in the previous four elections and led to the cementing of a political stalemate with none of the parties being able to establish a stable long-lasting government if any at all. A central issue in the last few elections was if PM Benjamin Netanyahu should remain on the political scene because of his corruption trials. Netanyahu, now being outside the executive power for about a year, is no longer that much in the news with his legal trials. However, as long as he remains a Likud leader, this would prevent the establishment of a rightist government, which would have easily been created otherwise given the preferences of the voters. Yet, all surveys continue indicating that Likud would be the largest party after the elections and the majority of respondents see Netanyahu as most fit for PM.

Likud-Haredi-religious alliance

Likud?is a rightist party, of national liberalism ideology. In August, the party's leader Benjamin Netanyahu presented an?economic plan, which comprises two major targets - fighting inflation and decreasing taxes. According to Netanyahu, inflation can be reduced by lowering prices of "inflation instigators": electricity, gasoline and water, and municipal taxes - which he promised to freeze for a year. Netanyahu promised to lower food prices by cutting taxes and tariffs. In the tax area, the listed steps are lowering income tax by further spreading out tax brackets and enlarging tax credit points, increasing negative income tax and lowering corporate taxes in order to encourage growth and income. Netanyahu also pledged reforms in housing and making pre-school education in the 0-3 age group free of charge. He said that the announced steps can be funded by an excess of government income and from improving the public sector's efficiency. Netanyahu stressed that he has managed the country successfully during three crises in the past so he was ready to take over again. Netanyahu also promised abundant funding to the ultra-Orthodox education institutions without adding core subjects to their curriculum.

Most recently, Netanyahu took very hawkish positions regarding external policy issues as he slammed PM Lapid for announcing support for a two-state solution to the Palestinian issue and for the deal with Lebanon over the maritime border demarcation. While Netanyahu has been mostly keeping silent on the former while he was PM and not revealing if he supports or rejects a two-state solution, a US official revealed few days ago that a similar agreement with Lebanon was on the table during Netanyahu's tenure too. Netanyahu also pledged massive building in West Bank settlements if he manages to establish a government.

The two Haredi parties?Shas and United Torah Judaism?represent the interests of the ultra-Orthodox society, being proponents of religious conservatism. The Haredi parties' demands usually focus on increasing funding for yeshiva students and for keeping yeshiva out of the army as much as possible as well as banning public works and transportation on Shabbat, which collides with the interests of centrist and leftist parties.

The?Religious Zionist Party?is a far-right ultranationalist religious party. It again teamed up with Otzma Yehudit, whose controversial leader Itamar Ben-Gvir is part of the Kahanist movement, which views all Arabs living in the country as enemies. Thus, neither of the political forces from the other bloc want to cooperate with Ben-Gvir. The Religious Zionist Party opposes to any settlement concessions and some of its members support full annexation of the West Bank. Noam, a far-right Orthodox Jewish political party, established three years ago by a very conservative faction in the Religious Zionist community, whose major goal is to advance policies against LGBT rights, also joined the union. The Religious Zionist Party currently competes for the third place with National Union.

Anti-Netanyahu bloc

This bloc comprises almost all the parties in the outgoing government with the exception of Habayit Hayehudi, which will support Netanyahu for PM. Those parties, including also Yamina under which Habayit Hayehudi becase part of the ruling, united last year, making large compromises, on a platform with the major goal to unseat Netanyahu. The bloc comprises parties from all across the political spectrum - from rightist to centrist and far-right as well as an Arab party.

Yesh Atid?is the largest party within this bloc and also the second largest among all parties but at far distance after Likud. Yesh Atid seeks to represent the secular middle class. As such, its platform focuses on changing the priorities in the country with emphasis on civil life, equal education and civil service for all citizens (targeting the Haredi sector), fighting political corruption, opts for smaller governments, reducing the cost of living and housing costs, a two-state solution with the Palestinians, but keeping the largest settlements.

National Union Party?was recently created by the merger between centrist Blue and White of defence minister Benny Gantz and the rightist New Hope of Gideon Sa'ar, a former senior official from Likud. The list also attracted a former army chief Gadi Eizenkot. The list is fighting for the third position with Religious Zionism Party. Blue and White is a centrist liberal party, which lost much of its voter base after Gantz formed a government with Netanyahu three years ago, something he had pledged not to do before the elections because of the corruption indictment against Netanyahu. However, it managed to stabilise but could not regain all of its voter base. New Hope was established two years ago as a rightist party but now it seems to have moved more to the centre. This is the party that probably has the strongest similarity to Likud since its leader Sa'ar and many of its member came from Likud, splitting from Likud mainly over personal conflicts with Netanyahu. New Hope has said it wants an expansion of the technological sector and the country's infrastructure and supports red tape reduction. It calls for improving education, reducing cost of living, making housing more affordable, pledges support for the disadvantaged sectors. The party wants to limit the term of the PM tenure to 8 years. Regarding settlements, it proclaims expansion.

Yisrael Beiteinu?is a secularist, nationalist right-wing party with its base mainly consisting of secular Russian speaking Israelis, predominantly representing the immigrants from the former Soviet Union. The party supports a two-state solution but is for keeping at least the large settlements in the West Bank. It is also pressing for reducing the rights of the ultra-Orthodox, which is one of the reasons for the party not being able to sit together with the Haredi parties. On the economic front, it is for supporting competition, reducing red tape, dealing with the housing issues and reducing the cost of living, policies which its leader Avigdor Lieberman, the incumbent finance minister, has been promoting in the past one year.

Labor?and?Meretz?are the two parties with the most leftist focus. They support the creation of a Palestinian state, end of settlement expansion and public transportation on Shabbat.

Ra'am?is an Arab party, which consists mostly of religious or nationalist Israeli Arabs, and enjoys particular popularity among the Bedouin. The party was the first Arab party to ever become part of a government in Israel. While zigzagging between the major blocs in the previous elections, the party is now strictly attached to the anti-Netanyahu bloc after its leader Mansour Abbas explicitly stated recently that he will not support Netanyahu for PM. The party is looking to solve problems in the Arab Israeli society, like widespread crime and poverty.

Other parties

Following the departure of alternate PM Naftali Bennett from political life and the de facto dispersal of rightist Yamina, the second most important official in the party, interior minister Ayelet Shaked teamed briefly with Derech Eretz and eventually joined?Habayit Hayehudi, becoming its leader. Shaked used to be part of Likud and then of Habayit Hayehudi before splitting with Bennet to form the New Right party, which later formed an alliance with Habayit Hayehudi called Yamina. Shaked is secular in her views while Habayit Heyhudi is a rightist religious party. The views of Shaked on most issues are rightist and even extremist in some cases. Shaked supports settlement expansion and is a vocal opponent to the creation of a Palestinian state. The party now polls far below the entry threshold. Yet, some uptick has been noticed recently, which if sustained, might eventually lead to Habayit Hayehudi entering the Knesset. Shaked is not likely to support a government comprising centrist and leftist parties again since she has been apologizing to her voters for doing so last year. She has said she will support Netanyahu but the Likud and the other parties from that bloc have been insisting Shaked should leave the race not to waste votes for rightist parties.

Hadash and Ta'al?are Arab parties and have never been a part of a government but used to support a government from the outside. Until recently, the two parties together with leftist extreme Balad and earlier with Ra'am ran together in elections and were the third largest party after the Sep 2019 elections. Currently, Hadash and Ta'al are close to the Knesset entry threshold and Balad is far below. Those parties have never been part of a government but have provided support from the outside in some occasions. They are unlikely to join any government after the elections, in line with announcements made by their leaders.

OPINION POLLS

Likud will emerge as the largest party after the Nov 1 ballots, with centrist Yesh Atid at distant second, according to all available voting preference polls. The Likud-led bloc is lately hovering around the 61-MK threshold for garnering majority to establish government. The anti-Netanyahu bloc has smaller chances and its only chance is a coalition with Hadash and Ta'al or support from that list from outside of the cabinet, which is not a very likely scenario.

LEGISLATIVE FRAMEWORK

The elections are being conducted using a party-list proportional representation voting system in which seat distributions are calculated using the D'Hondt method. Representatives of all parties that get at least 3.25% of the overall vote or some 140,000 votes are competing for 120 seats in the unicameral Israeli parliament, the Knesset. Turnout in the last elections that took place in March 2021 was at 67.2%, down from around 70% in the previous two races (71.0% in 2020 and 69.4% in September 2019) and just below 68% in April 2019. We note that turnout has been above 77% in all previous elections before 1999. It is expected the turnout to be particularly low among Arab Israelis. Voter exhaustion is rather evident among centrist and leftist voters while a relatively larger share of voters for rightist parties have expressed intentions to go to the polls on Nov 1. There are 6,788,804 eligible voters who can take part in the Nov 1 elections, up by 210,720 since the previous race last year.

The?Central Election Committee?should publish the official results within 8 days of election day (by Nov 8), exit polls will be immediately available when polls close.