Netanyahu faces triple crisis as March deadlines loom

Coalition tensions over the hostage deal, budget deadline, and haredi draft converge to create the perfect political storm for the Israeli government.

By ELIAV BREUER JANUARY 23, 2025 17:33

A WEARY Prime Minister Benjamin Netanyahu. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

A perfect storm awaits the government at the end of February and the beginning of March.

First, Phase 1 of the hostage deal ends in the first days of March.

On Thursday, the government voted to grant Tourism Minister Haim Katz the positions of interim National Security Minister, Negev and Galilee Minister, and Heritage Minister – the three ministries vacated by Otzma Yehudit’s departure from the government.

The positions will likely remain with Katz until the end of Phase 1. They will then serve as bargaining chips for a number of possible scenarios.

The first scenario is that the deal falls through, Israel reinvades Gaza, and Otzma Yehudit rejoins the government. In that case, the three ministers, MKs Itamar Ben-Gvir, Yizhak Wasserlauf, and Amichai Eliyahu, will return to their previous positions.

Prime Minister Benjamin Netanyahu in an interview with The Jerusalem Post. (credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

A second scenario is that an agreement is reached on Phase 2 of the deal, which will likely include concessions that will lead Finance Minister Bezalel Smotrich to leave the government as well. In this case, Prime Minister Benjamin Netanyahu may offer National Unity chairman MK Benny Gantz to reenter the government in Smotrich’s stead. Smotrich’s departure will free up three additional ministries – the Finance Ministry, the Aliyah and Integration Ministry, and the National Missions Ministry.

Gantz is unlikely to be offered the finance ministry

In this scenario, Netanyahu will have six ministerial positions to entice Gantz’s eight MKs. The prime minister is unlikely to offer the important finance ministry to Gantz. He could offer the finance ministry to Shas – which was supposed to receive the ministry already at the start of 2025, according to coalition agreements that were not implemented.

For example, Interior Minister Moshe Arbel could shift to become finance minister (Shas chairman Aryeh Deri cannot serve as a minister due to past criminal convictions). This would free up the interior ministry to Gantz’s party.

Two other issues will complicate these scenarios. The first is the national budget. Smotrich declared in December that the budget would pass by the end of January.

However, the preparation of the budget only began this week in the Knesset Finance Committee, and committee chairman MK Moshe Gafni and the other coalition members in the committee did not seem to be in a hurry. A more realistic expectation would be for the budget to pass by the end of February or even at some point in March when there will be more clarity as to Smotrich’s place in government.

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Smotrich may even have an interest in slowing the budget legislation in order for it to serve as leverage against Netanyahu; if the budget does not pass by the end of March, the government falls automatically. Smotrich warned that he would attempt to topple the government if the IDF did not reinvade Gaza, and delaying the budget could assist in achieving this.

Gantz said on Thursday that there were “parliamentary solutions” to prop up the government, even without him joining the government or supporting the budget, in order to see the hostage deal through to the end. It is unclear, however, what these solutions are, since the end of March is a deadline that cannot be circumvented.

The second issue is the haredi IDF draft bill. Defense Minister Yisrael Katz finished presenting his “principles” to the Knesset Foreign Affairs and Defense Committee this week, and the committee will hold two meetings a week beginning next week.

Still, there is no clear path forward on the bill. Katz’s “principles,” whereby the number of haredi 18-year-olds joining the IDF will gradually increase until reaching 50% of the cohort in seven years, are likely dead on arrival: The attorney general’s office deemed them discriminatory and unconstitutional, and the committee chairman MK Yuli Edelstein is unlikely to support them.

Time is against the haredi parties’ side since more and more haredi youngsters are receiving draft orders. In addition, at the end of February state subsidized daycare for children of military-age haredi yeshiva students will expire.

This is a significant financial sanction. In the meantime, very few haredim have respected draft orders. However, the IDF has progressed significantly in preparing special units and even entire bases for haredi soldiers, and public sentiment is strongly in favor of haredi service. These factors could come to a boiling point at the end of February and could lead to a haredi walkout from the government.

The end of Phase 1 of the hostage deal, the expiration of the haredi daycare subsidy, and an uptick in urgency to pass the 2025 budget are all likely to occur in the waning days of February or early March. There is a reasonable chance that Netanyahu may prefer to announce an election and take advantage of the three-month election period to continue with Phase 2 of the hostage deal and perhaps take strides towards the long sought-after normalization with Saudi Arabia.

But if there is a master at wiggling out of thorny political situations, it is Netanyahu, and he is very likely already working towards overcoming these hurdles.