Israel Brief – August 2021
Monfort Advisory brief / August 2021
Since its swearing-in two months ago (June 2021), the new government has been working with
little fanfare or public controversy. The following report will present the main decisions and
issues made and addressed by this new coalition since its establishment.
Covid-19: After Israel fully reopened, Covid-19 cases are slowly rising across the country. The new
government is working to address this new surge while also trying to avoid broad moves like
national lockdowns and reintroducing statewide restrictions. The Corona Cabinet is attempting
to enact measures ahead of calling for a general lockdown that might be placed during the Jewish
High Holiday period, including restrictions on closed-venue events (for vaccinated individuals
only) and mask requirements for large gatherings in the open air.
At the moment, restrictions include full quarantine periods for those returning from certain
countries (while trying to keep the country open for the time being) and enhancing enforcement
for violations. Moreover, Israel has amped up its testing capacities and is preparing for the new
school year in September.
State budget: The major issue facing the new government was passing a budget, a move that
would cement it and prevent its collapse. Following a three-year period where the county did not
have a budget, an approved budget would not only reaffirm the government’s stability but also
indicate its strategic directions and priorities moving forward. Last week, the government
unanimously approved a 2021-22 budget, which will not be moved to a vote in the Knesset.
The new budget allocates billions of shekels to the country’s health system, while also executing
a broad cut of 1.5% across all governmental offices. Additional elements were a budgetary
increase to the security and defense budget, agricultural reform, raising the retirement age for
women, and reducing limitations on imports. The specific details of the new budget are not overly
dramatic (the increase of the health budget is probably the most significant and notable change),
but the main significance is the introduction of a budget and its approval, which marks a
milestone in the life of this new government and bodes well for its chances of survival. The battle
in the Knesset over the approval is likely to be difficult, but it appears that the budget will pass.
Security: On the security and defense front, the new government’s main challenge continues to
be Iran. Incidents in the Persian Gulf contribute to sustained tension between Israel and Iran, and
there are voices in the new government calling to be more aggressive and retaliate. However, at
the moment, the mainline of Prime Minister Bennet is to exhaust diplomatic channels and not
resort to force. Israel’s efforts at the moment are focused on amassing evidence and data against
Iranian aggression in the Gulf to motivate international action against the country, indicating that
the new government is holding to a more moderate line of working in tandem with the
international community rather than advance unilateral moves.
At the same time, the Iranian arena is not the only one heating up; as the Israeli High Court gears
up to discuss the appeals of the Palestinian families in Sheikh Jarah in East Jerusalem, against
their evacuation from their homes, tensions and protests arise there as well, including increased
tensions in the Temple Mount. In the West Bank, four Palestinians were killed in separate
incidents over the past week, and without containment of these various arenas, escalation could
be seen across the country once more, with Hamas always likely to contribute to the rising
tensions by firing rockets from Gaza. So far, the new government is holding true to a line of
moderation and avoiding escalation, but the situation continues to be fragile. Another violent
escalation would be a serious test to this new government, whose ideologically disparate
members may find it very difficult to keep uniform and speak with a unified voice when faced
with such challenges