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Policy Department the Political and Economic Situation in Israel

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Policy Department the Political and Economic Situation in Israel Directorate-General External Policies Policy Department The Political and Economic Situation in Israel and its relations with the European Union NOTE Abstract: This note is one of a series of such notes produced for the information of MEPs and the delegations of the European Parliament. It is a revised and updated version of an earlier note on Israel. DGExPol/B/PolDep/Note/2005_044 3 February 2005 PE 351.340 EPADES\DELE\ISRAEL\NT\555430EN.doc EN This note was requested by: the European Parliament's Delegation for relations with Israel. This paper is published in the following languages: English (original), French. Author: Anthony Comfort DG External Policies, Policy Department SCH 06B014 European Parliament, Luxembourg Manuscript completed in February 2005. Copies can be obtained through: E-mail: [email protected]] Brussels, European Parliament, 2005. The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. PE 351.340 EPADES\DELE\ISRAEL\NT\555430EN.doc 2 Political situation Official name State of Israel National legislature Unicameral Knesset of 120 members directly elected by proportional representation for a four-year term. Universal direct suffrage over the age of 18. Parliamentary election: 28 January 2003. Next elections must be held before November 2006. President, elected by Knesset majority for a five-year term. Head of state Moshe Katsav National government Cabinet, responsible to the legislature; Likud formed a coalition government with Shinui, National Union and the National Religious Party (NRP) on February 28th 2003. In June2004 the National Union was ejected from the coalition and two (out of six) NRP members also left. The remaining four NRP members quit the coalition in November, leaving the government with a 55-member minority government. On 1 December 2004 the prime minister dismissed Shinui's five government ministers, leading to the party's exit from the coalition and leaving only the 40-member Likud in government. A new coalition government was formed in January 2005. Main political parties Likud (Yisrael Ba r Aliya immigrant party has merged with Likud); One Israel (consists of Labour Party and Meimad); Shinui; Shas; National Union (consists of right-wing Moledet and Tkuma and immigrant party Yisrael Beiteinu); National Religious Party (NRP); Meretz; United Torah Judaism (includes Agudat Israel and Degal Hatora); United Arab List; Hadash; One Nation (labour union party now merged with Labour); Balad (Arab party) COALITION GOVERNMENT: (Formed 10 Jan 2005) (For party affiliations see end of list) Prime Minister..................................Ariel SHARON (LIK) Deputy Prime Minister......................Silvan SHALOM (LIK) (Also Foreign Minister) Vice Prime Minister..........................Ehud OLMERT (LIK) (Also Industry, Trade & Labour Minister) Vice Prime Minister..........................Shimon Peres (LAB) - - - - - - - MINISTERS: Agriculture........................................Yisrael KATZ (LIK) Communications...............................Dalia ITZIK (LAB) Defence.............................................Shaul MOFAZ (LIK) Education, Culture & Sport...............Limor LIVNAT (LIK) Environment......................................Shalom SIMHON (LAB) Finance..............................................Benjamin NETANYAHU (LIK) Foreign..............................................See Deputy PM Health................................................Danny NAVEH (LIK) Housing.............................................Isaac HERZOG (LAB) PE 351.340 EPADES\DELE\ISRAEL\NT\555430EN.doc 3 Immigration & Absorption...............Tzipi LIVNI (LIK) Industry & Trade.............................see Deputy PM Interior............................................Ophir PINES-PAZ (LAB) Internal Security.............................Gideon EZRA (LIK) Justice.............................................Tzipi LIVNI (LIK) Labour.............................................see Deputy PM National Infrastructure....................Benjamin BEN-ELIEZER (LAB) Science............................................see PM Tourism..........................................Abraham HIRCHSON (LIK) Transportation ....... .......................Meir SHEETRIT (LIK) Welfare...........................................see PM Without Portfolio............................Natan SHARANSKY(LIK), Tzachi HANEGBI(LIK), Haim RAMON (LAB), Matan VILNAI(LAB) - - - - - - - PARTY AFFILIATIONS: LIK -- Likud LAB -- Labour - - - - - - - Speaker of the Knesset.....................Reuven RIVLIN - - - - - - - Governor-elect of the central bank...Stanley FISCHER Constitution, institutions and administration Israel is a democratic republic with a unicameral 120-seat parliament, the Knesset, elected every four years under a system of proportional representation. The leader of the largest party or voting bloc is called on to form a government, and will, upon succession, function as prime minister. The formal head of state is the president, currently Moshe Katzav, elected by the Knesset every five years, but his role is essentially ceremonial. The country was founded as a Jewish state, the religion of about 80% of the population, but individuals of other faiths are free to practice. However, the power of the orthodox stream of Judaism means that reform and other modern streams of Judaism do not receive recognition in Israel, despite strong pressure from Jews outside the country. The need to deal with pressing economic and security issues means that even with Shinui in government, radical changes have yet to be made. Matters pertaining to family law, such as marriage and divorce, are administered by the respective religious institutions of the recognised bodies of the faiths. Outlook for 2005-06 In 2004 prime minister Ariel Sharon controlled a minority government having lost all his coalition partners, while his right-wing Likud party, which has 40 seats in the 120-member Knesset (parliament), was also deeply divided over his pursuit of unilateral Israeli disengagement from the Gaza Strip and from four small settlements in the West Bank. On 11 January 2005 a coalition government was sworn in and Mr Sharon brought into his government new partners - Labour and the ultra-orthodox United Torah Judaism (UTJ). But broad ideological differences over security issues both among the coalition allies and within the Likud, as well as differences over socio-economic issues, still make Mr Sharon's government PE 351.340 EPADES\DELE\ISRAEL\NT\555430EN.doc 4 vulnerable to collapse. Mr Sharon does not have a permanent majority in the Knesset but is obliged to form coalitions for each new measure. In theory his government is supported by 64 members of the Knesset: 40 Likud, 19 Labour and 5 UTJ, but the vote of confidence was passed by only 56 to 54, with 13 Likud members voting against or abstained. The disengagement from Gaza and the accompanying special budget must be approved by early March if it is to take place as planned by early July. The national budget must also be adopted by 31 March in order to avoid early elections. Because of various constraints on the opposition it is likely that these dates will be achieved. With the death of the Palestinian leader, Yasser Arafat, the US appears more willing to push for a resumption of bilateral peace efforts, and domestic pressure to deal with the security situation has also intensified. The disengagement plan could provide the framework on which possible efforts to restart the road map to peace, or another bilateral process, may be based. The plan is strongly opposed by many in Israel, but - given the popularity of Mr Sharon's stance on the Palestinian-Israeli conflict and the political weakness of the centre-left, as well as an awareness in Likud that they would probably lose votes in an early election - the prime minister may be able to do enough to avoid a collapse, provided that violence remains at low levels. If elections are called early, Mr Sharon could win a fresh mandate to continue peace talks, although the finance minister and former Likud prime minister, Binyamin Netanyahu, is a strong contender to succeed Mr Sharon as prime minister if opponents of disengagement gain the upper hand politically. Recent political developments The assassination of Yitzhak Rabin, a centrist Labour prime minister, by an ultra-nationalist Israeli Jew in November 1995 highlighted the political tensions generated by the peace process in Israel. Left-right rivalry on the Arab-Israeli question predates the foundation of the state. Labour (left) and Likud (right) are the two main parties representing this ideological divide. The differences between the two parties on economic issues are minor, with both cautiously espousing (if not always implementing) generally liberal economic policies, although in the past Labour pursued centrally planned economic policies. However, a new electoral system inaugurated in 1996 (see Constitution, institutions and administration) brought about another result: the fragmentation of Israeli politics. The two major parties, Likud and Labour, which had previously tended to secure at least 80 seats between them, were able to muster only 66 seats in the 1996 election. This trend was intensified in 1999, when Likud and One Israel (Labour and its electoral bloc) managed to win only 19 and 26 seats respectively. By contrast, social issue parties increased their seat total from 22 in 1992 to 47 seats in 1999.
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