REFERENDUM BILL EXPECTED TO FAIL, BUT SHARON STILL

C O N F I D E N T I A L TEL AVIV 001842

SIPDIS

E.O. 12958: DECL: 03/25/2015
TAGS: PGOV KWBG ECON IS GOI INTERNAL ECONOMY AND FINANCE GAZA DISENGAGEMENT
SUBJECT: REFERENDUM BILL EXPECTED TO FAIL, BUT SHARON STILL
SWEATING TO MUSTER BUDGET MAJORITY IN UPCOMING KNESSET VOTES

REF: TEL AVIV 1456

Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4 (b,d).


1. (C) The ongoing political machinations leading up to next
week's Knesset votes on the 2005 budget and disengagement
referendum legislation, do not change Embassy's expectations
that Prime Minister Sharon will muster a Knesset majority for
the 2005 budget and that a majority will defeat the
referendum bill. The budget and referendum legislation were
voted out of committees March 22 and March 23 respectively.
Statements issued by the Prime Minister's office March 25
that the budget may fail, as well as reports of Likud
elections preparations, could be part of Sharon's tactics to
pressure MKs that do not want early elections and/or to be
responsible for disengagement failing. Sharon will meet
Shinui leader Tommy Lapid March 26 and Yahad leader Yossi
Beilin March 27 to seek either yea votes or abstentions from
their parties' MKs. At least five of the six Yahad members
are willing to help Sharon.

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Budget Votes
--------------


2. (C) Sharon can still only count on 53 MKs (reftel) to
support the budget, with 67 MKs either wavering or set to
oppose the budget. Embassy sources have indicated that
Sharon may need more than an absolute majority of 61 MKs to
ensure government majorities in votes on numerous budget
amendments. Embassy sources expect Sharon to garner the
necessary combination of yeas and abstentions from at least
one Arab party and Yahad, and perhaps several of the 13 Likud
rebels, who have tied their support for the budget to
Sharon's support for a referendum. If the referendum bill
fails on March 28, some of the Likud rebels may decide that
since the referendum is dead, they can therefore support the
budget. Sharon may sweeten the pot by offering some of the
rebels funds for pet programs.


3. (C) Shinui MK Ilan Leibowitch told poloff March 24 that
Lapid is not sharing his strategy and ultimate decision with
Shinui's rank and file. Leibowitch and fellow Shinui MK Ehud
Rassabi told poloff separately March 24 that most Shinui MKs
do not want Sharon's government to fall, but that Shinui's 14
MKs will follow Lapid's voting instructions. Leibowitch
confided, however, that he will have a hard time sticking to
party discipline if his vote would prove decisive.
Leibowitch speculated that Lapid would announce shortly
before the vote that Shinui will abstain to save
disengagement.

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Referendum Vote
--------------


4. (C) Chances for passage of the referendum bill are
negligible, regardless of the vote of Shas, which resists the
concept of referendums out of fear they could be used on
religious issues. Shas spokesperson Yitzhik Soudri and Shas
MK Amnon Cohen told poloff March 23 and March 24 respectively
that they are confident that Shas spiritual leader Rabbi
Ovadia Yosef will instruct the 11 Shas MKs to oppose the
referendum. Soudri said he did not expect Rabbi Yosef to
change his opposing position despite the "heavy pressure"
that settler movement rabbis are exerting on him to support
the bill. Ultra-Orthodox Agudat Yisrael MK Ya'akov Litzman
and Degal HaTorah MK Moshe Gafni indicated to poloff that
their respective parties will also oppose the bill, although
Gafni was less committal. Assuming the positions of these
religious parties remain firm, over 70 MKs would rally
against the bill. If it fails, the Knesset cannot reconsider
a disengagement referendum bill for six months.



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