Israel to Hold Elections in April, Netanyahu’s Government Announces

Israel’s coalition heads announced Monday that they have unanimously decided to hold elections on April 9, adding that the Knesset will be dissolved ahead of the elections.

Prime Minister Benjamin Netanyahu told coalition heads at the beginning of the meeting that they need to discuss elections. Finance Minister Moshe Kahlon immediately agreed, while coalition chair David Amsalem said that it is difficult for the government to pass laws with the Knesset’s current make-up, given the coalition’s narrow majority.

"We cannot continue like this" Amsalem said. Netanyahu responded: "So if it’s too difficult, we need elections."

>> Analysis: Why the timing of the Israeli election matters so much to Netanyahu

Education Minister Naftali Bennett, leader of the right-wing Habayit Hayehudi party, did not attend the meeting but was called afterward to secure his approval. Bennett lent his support, along with Interior Minister Arye Dery, leader of the Shas party, and United Torah Judaism MK Moshe Gafni.

Netanyahu will speak momentarily on the decision to hold early elections.

Tel Aviv stocks sharply turned direction downward in mid-afternoon trading following the announcement. While Israeli shares had been mixed with a negative bias in early afternoon following a 5% drop by Israeli large-caps the day before, the announcement seems to have spooked local investors, at least to some degree. The large-cap index,TA-35 and the broader TA-125 are both down 1.7% and smller-cap indices are losing about 0.9%.

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The announcement came hours after Yesh Atid chairman Yair Lapid announced that his party will vote against the new law on drafting yeshiva students when it comes for its final votes in the Knesset two weeks from now. At the beginning of a meeting of the party’s Knesset members, Lapid said Netanyahu “has surrendered to the ultra-Orthodox because he is afraid of them. We are done being suckers.”

The law has been a source of tensions for the current government over the past several months, threatening to derail the coalition and bringing about early elections.

Avidor Lieberman’s Yisrael Beiteinu party has also retreated from its support for the new law on drafting yeshiva students. The party announced on Monday morning that it is reexamining its decision to support the bill, saying it needs to determine whether the law has been “emptied of content” in the agreements between Likud and the ultra-Orthodox parties.

Likud members made it clear that the proposed law has not been changed and said now is the time Lieberman and Lapid “will be put to the test: Will they keep their commitments to the public and support this important law, or will they deal in petty politics at the expense of the IDF and Israeli society. The choice is in their hands.”

Last month, after Lieberman’s resignation from his post as defense minister and his party’s leaving the government coalition, sources in Yisrael Beiteinu said the party would support the draft law if it remained unchanged: “Not even a comma” from the bill approved by the Knesset in its first vote (of three). Because of this promise, and a similar commitment from Yesh Atid, Likud had planned on passing the law in the full Knesset with these votes from opposition parties.