OLMERT SUCCESSION SCENARIOS

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 001694 SIPDIS E.O. 12958: DECL: 08/04/2018 TAGS: PGOV PINR PINS IS SUBJECT: OLMERT SUCCESSION SCENARIOS Classified By: Charge d'Affaires Luis G. Moreno. Reason 1.4 (B/D) ¶1. (C) Summary: Prime Minister Olmert's surprise announcement July 30 that he intends to resign his office when Kadima elects a new chairperson coincided with the very end of the summer session of the Knesset, a time when FM Tzipi Livni, DefMin Ehud Barak and Minister of Transportation Shaul Mofaz were in Washington. This cable outlines several scenarios for what will follow the September 17 Kadima primary in which Livni, Mofaz, as well Minister of Interior Meir Sheetrit and Minister of Public Security Avi Dichter will compete. If no one wins a majority in the first round of the Kadima primary, a second round will be held on September 24. Olmert has stated that as long as he serves as Prime Minister -- which could be anywhere from three-to-six months, he will "attempt to continue bringing the negotiations between ourselves and our neighbors to a successful conclusion." On July 31, Olmert accepted the resignation of his Chief of Staff, Yoram Turbowicz on July 31, but Turbowicz will continue to play a diplomatic role as special advisor. End Summary. -------------- Primaries - September 17 and 24 -------------- ¶2. (C) On July 30, PM Olmert announced that he had decided not to compete in the Kadima Party primaries, now scheduled for September 17. He added that he had no intention of interfering in those elections and pledged to "resign my post as prime minister in order to allow the elected chairperson to assembly another government swiftly and efficiently." Livni and Mofaz are the clear front-runners, and each has hired high-profile strategists to advise their campaigns -- with Eyal Arad and Reuven Adler (formerly advisors to PM Sharon) on Livni's team, and Arthur Finkelstein (formerly advisor to PM Netanyahu) working for Mofaz. After the first round of the Kadima primaries, Dichter is likely to rally with Livni due to his dislike of Mofaz. Sheetrit is likely to rally with Mofaz, or may return to the Likud Party from whence he came. Olmert, despite his pledge not to interfere, will do all he can to support Mofaz, who has remained loyal to him throughout the past 30 months in the view of many Israeli analysts. -------------- SCENARIO I - NEW PRIME MINISTER -------------- ¶3. (U) Once Olmert resigns, President Shimon Peres will consult with party factions in the Knesset and must, within seven (7) days, assign the task of forming a government to the MK who has notified him that s/he is prepared to do so. That person has 28 days to form a government, a period of time that can be extended by as much as another 14 days. If this MK fails to form a government within 42 days, then the President may assign the task to another MK, who, in turn, has a maximum of 28 days to form a government. (There are complex provisos for a third attempt, but such a scenario is unlikely.) Olmert will remain in power as the caretaker PM to insure continuity of government throughout this process, which is likely to come to a head after the Jewish holidays in mid-October. (Note: the holidays do not formally affect the prescribed timetable for government formation, but they will make it unlikely that a Kadima leader will be able to construct a coalition before the end of October when the Knesset begins its winter session.) ¶4. (C) If elected to head Kadima, Minister Mofaz has publicly stated his intent to form a national unity government before the November 11 municipal elections. However, Opposition leader Netanyahu (Likud) has reportedly stated his unwillingness to serve in any Kadima-led coalition before general elections. Mofaz has reached out to Shas MK's in an effort to cultivate their pivotal support, but Shas spiritual leader Ovadia Yosef embraced Netanyahu on August 3, a signal that many pundits have interpreted as a political nod in favor of the Likud preference for general elections. Labor Party Chairman Barak once served as Mofaz' commander and would not be thrilled to serve in a Mofaz-led government, according to one Labor insider. Moreover, many Labor MK's would not want to serve in a right-leaning government whose leader is not publicly committed to active negotiations with the Palestinians. ¶5. (C) FM Livni is likely to try to form a centrist government with Labor, and she too has hinted at a national unity government with the Likud, a scenario that is unlikely absent a major national security crisis given Netanyahu's current stance. Shas will prefer not to participate in a Livni-led government, but could be swayed by commitments to restore child allowances, an issue which will become central to the political debate of the coming months. Barak will TEL AVIV 00001694 002.14 OF 002 strongy favor a Livni-led government in which he will apear to be the strongman. This option is the bes one open for him, as he is not a MK and thus canot serve as prime minister. (Barak's popularityhas dropped significantly in the year since he joined the government -- an anomaly for Israeli defense ministers, who usually enhance their political stature in this job.) An interim, alternative government with Livni at the helm positions him best for scheduled, general elections in the fall of 2010. -------------- SCENARIO II - EARLY ELECTIONS -------------- ¶6. (U) Popular sentiment favors new elections over a reshuffle, according to several recent polls. The current Kadima faction leader, MK Yoel Hasson, has said that chances of the party forming an alternative government are slim -- but he favors Livni as the Kadima leader with the best chance of competing against Netanyahu in elections. If no MK is able to bring a majority of Knesset members to support his/her government, then the Knesset will be considered to have dispersed. New elections will be held on the last Tuesday in the 90 days that follow (i.e. sometime in the January-March 2009 timeframe depending on when the final failure to form a reshuffled government occurs). Olmert remains the caretaker PM during this period. ¶7. (SBU) Likud is the front-runner in polls should early elections come about, but a Livni-led Kadima Party is a close second (and beats Likud in some polls). Should Mofaz head Kadima, Netanyahu's Likud Party will outdistance Kadima and Labor by substantial margins. In such a scenario, Netanyahu will be tempted to create a right-wing government, but will be under popular pressure to create a broad, national unity government. Alternatively, Barak's Labor Party and a Livni-led Kadima could join forces, a move that could give them the nod to form a government. -------------- BUDGET BATTLES IN THE OFFING -------------- ¶8. (SBU) Even if Livni or Mofaz succeeds in forming an alternative government this fall, the knives will be out in budget battles that follow. Normally, the government must approve a budget by December 31. Reconciling the competing promises made to prospective coalition partners will be a costly enterprise that could lead to the early demise of any coalition. A budget must be agreed no later than March 31. Failing that, elections are in the offing 90 days thereafter. While this scenario has never transpired, the circumstances of Shas, Pensioner or Labor demands could be the proximate cause of a coalition rupture. -------------- COMMENT -------------- ¶9. (C) Comment: Olmert may yet wring a policy victory out of the end of his political career no matter who wins the Kadima primary. Olmert continues to pursue peace talks with Syria -- and his erstwhile Chief of Staff, Yoram Turbowicz, is staying on to pursue this initiative on a "volunteer" basis -- not unlike the role played by his predecessor, Dov Weissglas. Current negotiations with Syria do not involve FM Livni, who remains engaged in the more complicated and politically trying dossier of Palestinian negotiations. Syria talks would undoubtedly displease Mofaz, who is rumored to be considering settling in the Golan Heights. Olmert could also decide to press ahead with the Palestinian agenda to which he has devoted enormous energy, leaving the political costs of these negotiations to his successor. End Comment. ********************************************* ******************** Visit Embassy Tel Aviv's Classified Website: http://www.state.sgov.gov/p/nea/telaviv You can also access this site through the State Department's Classified SIPRNET website. ********************************************* ******************** MORENO