Thinking Through the Consequences of the Israeli PM’s Resignation Announcement

Israel’s PM Ehud Olmert announced last night that he would be standing down and not running for the leadership of the Kadima party.  In that speech, Olmert reiterated his commitment to the peace processes he has launched, on all tracks, explained why they are in the Israeli interest, and gave an all around dignified performance—which was even lauded by many in the punditocracy whoIMG have hounded him for the last two years.  The circumstances of his departure are unfortunate to say the least.  But Olmert the politician (the wheeler-dealer—not so much) is considered to be highly effective and is clearly well liked—great interpersonal skills and human management, effective coalition maintenance, the veritable unmensch mensch.  But what does his resignation announcement mean for what happens next?  I will look briefly at five areas:  the politics—both inside the party and in general, the Palestinian situation, the Syrian talks, and the Iran file.

1. What Happens Next Politically?  Inside the Ruling Kadima Party

The technical details are as follows:  Kadima’s circa 70,000 members are eligible to vote in a leadership primary to be held on September 17th.  Four candidates have so far announced their intention to stand, all of whom are serving as ministers in the current government—Foreign Minister Tzipi Livni, Transportation Minister Shaul Mofaz, Interior Minister Meir Sheetrit, and Public Security Minister Avi Dichter.  Any candidate receiving 40 %-plus one votes in the first round becomes party leader.  If no one achieves that, then the top two candidates go into a second round run-off on September 25th.  Polls over the last few months have consistently shown that Livni and Mofaz have a significant lead over Sheetrit and Dichter, both of whom are considered to be rank outsiders.  The race between Livni and Mofaz looks close (polls suggest a small advantage to Livni in the head-to-head run-off).  Mofaz has stayed closer to his years in the Likud and is staking out a more hawkish right-wing position, while Livni is a more obvious fit to lead aIMG self-styled centrist, moderate party.

Mofaz is considered to have the advantage of a better ordered political machine amongst the Kadima members, including key vote contractors in unions associated with his ministry work.  He also looks better placed in being able to form a new governing coalition without going to new elections, and he’s likely to have the support of Olmert (useful in certain party branches and islands of loyalty, but not with the broader public).

Livni’s ace in the hole is her greater popularity with the broader public in Israel—Kadima led by Livni is competitive in a general election.  Led by Mofaz, the party sinks, at least according to all of the polls.  Livni is also better placed to adopt the mantle of the clean politician who offers a break with the past corruption and clientelism.  Mofaz just does not fit that role, and there is plenty of speculation that he has skeletons in his closet which at some point will come out.  And much of the party leadership is with Livni.  Livni will argue that even if she can’t form a coalition without elections, Kadima should still not fear elections under her leadership.

2. What Happens Next Politically?  The Bigger Picture for Israel

Whoever wins the Kadima primary will have twenty-eight days to put together a governing coalition, with the possibility to extend that by another fourteen days.  If that is successful, and a new government is sworn in, then elections need not take place until the scheduled date in 2010.  If, however, the new party leader is unable to stitch together a working coalition, then Israel will go to a general election after about one-hundred days (the party faction leaders in the Knesset can agree on a date, and that will likely be February or March).  Most of the commentary suggests that for the duration of the interim period—when coalition talks are being conducted and if they fail then right up to elections—Olmert will remain as a caretaker Prime Minister.  There does however seem to be a mechanism whereby Olmert could recuse himself while enabling the new Kadima leader to be the acting Prime Minister in the run-up to elections if a new government has not been created.

There are a number of options that a new Kadima leader would have in forming a governing collation without elections.  The most likely for either Mofaz or Livni would be to maintain the current coalition with Labor, Shas, and the Pensioners.  Shas may demand a high price (literally with them it tends to be all about money for their party institutions), something which may be less palatable and damaging to public image for Livni than for Mofaz.  Likewise, Labor could feel uncomfortable in a Mofaz-led government, as Minister Ami Ayalon implied in an interview this morning with Israel Radio:

I think that the Labor Party should not join any government that does not continue to try to exhaust the peace process. I will not go along automatically with just anyone. Declarations that tomorrow we will attack Iran or that we will never leave the Golan Heights, will make it very, very hard for the Labor Party to join.

But then again, Ehud Barak is in charge of Labor, and he is a more flexible breed of politician than Ami Ayalon.

Mofaz could also try to create a Kadima right-wing coalition, with smaller religious and rightist parties, including that of Avigdor Lieberman.  Both sides on that equation seem to be flirting with the idea, but it is still early.  A Likud-Labor-Kadima government is unlikely, and Livni’s expression of preference for this option seems more to do with campaign positioning than with realistic plans.  It is of course possible that the election within Kadima is deemed to be illegitimate and that the party fails to coalesce around a leader thus elected and it splits—but that scenario is unlikely.

If Israel does go to general elections, then the Likud under Netanyahu leads in the polls, but sometimes by a very narrow margin when faced with a Kadima party led by Livni.  Labor under Ehud Barak is struggling to pass the twenty mandate mark in those polls.  Most money is on Netanyahu winning an election and forming a right-right or a right-center government, possibly including Labor.  A personal comment here—it would be dreadful for Labor and Israel if Labor serves again as a fig leaf for a right-wing government.  If Bibi wins, let him govern, let him navigate.  He is not so scary, and the reality can often look very different when you’re in the Prime Minister’s seat.

3. What Happens Next to the Palestinian Situation?

Since his speech last night, Ehud Olmert has repeated that he will continue the negotiations with Abbas with a view to still reaching an agreement.  And senior Bush Administration officials have made similar comments.  Reaching a deal under these circumstances will almost certainly not, and it is fair to say should not, happen.  One of Yediot Ahronot’s leading commentators, Simon Schiffer, dismissed the idea in today’s newspaper, dryly noting that “happy is he who believes”.  The Bush administration should not repeat what its predecessor did and try to impose a U.S. timetable on the parties.  That also applies to Olmert’s political timetable.  There is apparently a price to pay for almost seven years of the Bush Administration’s disengaging, losing credibility, and letting this fester.  Someone could make the argument that after last night’s speech, Olmert is free of the suspicion that any peace deal he achieved would be in order to serve his personal-political survival.  In other words, he can finally do the deal.  You could even say he would be doing the dirty work for a future leader who would “begrudgingly” accept what they know to be necessary.

I don’t see it that way.  I don’t think Olmert is yet there on content.  I don’t think an agreement carrying his name has legitimacy or credibility or is a good idea (even if that’s a sad thing).  I don’t think it would be accepted by his successor or even his current cabinet.  And I don’t think the Palestinians see many benefits to signing with Olmert—their principal concern seems to be not getting blamed for any failure in the process.

What the US should be thinking about right now is a plan B.  That would mainly consist of two things: (1) is there a way to preserve some of the progress made in negotiations?; (2) how to prevent a further deterioration of the situation on the ground—settlements, closures, security.  But getting to the crucial issue of reconstituting a unified Palestinian national platform and movement is clearly not on this Administration’s agenda (and one fears it’s unlikely to feature on that of its successor, either—rendering any future peace process debilitatingly fragile).

For Olmert and those around him, two issues should be paramount: one is maintaining the cease-fire in Gaza, which holds but is fragile; the other is securing a deal for the release of Gilad Shalit.

4. What Happens Next?  The Syria Talks

The Israelis and Syrians this week conducted their 4th round of proximity talks with Turkish mediation in Ankara.  Olmert has also talked about the Syrian track in terms of being closer than ever to a conclusion.  But that happening under Olmert looks like even more of stretch and even less likely than a Palestinian deal, as the Syrian track has the added complication of the U.S. not being on board—an ingredient that is most certainly a prerequisite for closure.

It’s far from clear whether the Israeli side is ready to bite the bullet on the withdrawal from the Golan Heights, and the kind of quid pro quos from Syria regarding its regional relations will also be far from easy.  It seems that both sides currently see advantages in maintaining the Turkish-mediated dialogue.  Within the Israeli Defense establishment, there is almost a consensus that these talks add a helpful element of enhancing the predictability of stability and security on Israel’s northern border.  That consensus does not hold within Israel’s political leadership, so whoever Olmert’s successor is, there is no guarantee that the Syria talks will continue (and for now at least, the Americans will not be pushing in this direction, and possibly the opposite).

On the Syrian side, the fact of the conducting of talks with Israel has helped send a message of a more constructive and engageable Syria to Americans (looking past this Administration) and to the Europeans (see the breakthrough for instance in French-Syrian relations).  But a breakthrough on Israel-Syria will almost certainly have to wait for the next leaders in both Israel and America.

5. What Happens Next?  The Iran File

With all the chatter over a possible Israeli strike against Iran, it is worth setting down certain realities.  If Israel does act, and I think it is unlikely, it will not be because of political caprice dictated by an outgoing politician as part of some legacy.  Israel’s security establishment does not work like that.  Some people may suggest the following scenario:  if Israel is going to elections, the new Kadima leader fails to form a coalition and Olmert is seeing out his final days between November and January, then that is the most dangerous time.  I don’t see it.  And it’s worth remembering that the Pentagon still has its say during that November to January window.

If anything, it might be worth considering that the louder the Israeli rhetoric, the more this is about leverage rather than imminent action.  Israel’s leaders in the defense establishment are cognizant at how complex and potentially risky a strike would be (see this brilliant piece by preeminent military historian and strategist Martin van Creveld, a Professor at Hebrew University).  That’s not an argument for complacency.  It is though an argument for taking a deep breath.

And if Israel does have a new Prime Minister in October, then expect caution to be even more the watchword—even if that person is Mofaz (and his bellicose rhetoric).  But here’s one prediction I will confidently make: if it is Mofaz, expect oil prices to go up.