Sharon flexes political muscle in budget crisis

Sharon's coalition ousted Israel's largest religious party yesterday after a budget vote.

Few would have expected it, but Israel's ultra-Orthodox Shas party has something in common with Palestinian leader Yasser Arafat.

Both are targets of Israeli Prime Minister Ariel Sharon's calculated rage.

While Mr. Arafat has faced tanks and gunfire, Shas leaders are confronting a safer, yet similarly daunting onslaught from Mr. Sharon. Yesterday, the clock was ticking for their resignations to go into effect, a day after Sharon, faced with a Shas rebellion over emergency budget cuts, did what no Israeli prime minister has ever done: He ordered a mass expulsion of ministers.

The internal intrigues of Israel's free-wheeling political system may have foreign policy implications. As Israel's economic policymakers see it, passage of the budget is crucial to boosting the confidence of foreign investors after an alarming drop since the September 2000 outbreak of the intifada. Analysts say that if Sharon has to work to keep his coalition together, he is unlikely to be completely negative about the peace process because he will be more dependent on his relatively dovish Labor party ally.

"It could turn into a chance to calm things down in the [Occupied] Territories. Sharon would be likely to keep talking about the international conference idea," says Wadi Abu Nasser, a Haifa-based political analyst.

Shas leaders, who opposed budget cuts on the grounds that they would hurt the party's lower-income constituency, were hinting they wanted to come back into the cabinet yesterday. But Sharon told reporters he was "fixed" in his decision, and he obtained passage of the budget he had sought after. After its initial defeat on Monday, the Israeli parliament yesterday easily passed the resubmitted economic austerity plan, which must pass two more votes before it is final. The plan passed by 65 votes in favor, 26 against and seven abstentions. The Shas party was not present at the ballot.

Regardless of its ramifications, Sharon's confrontation with Shas this week offers a lesson in his leadership style. "We saw the same, no-compromise approach he used with Arafat," says Yossi Alpher, former director of the Jaffee Center for Strategic Studies. Just as he insists Arafat is no interlocutor, Sharon reportedly ordered his aides not to take any calls from Shas leaders after the vote, giving the message that they are not partners to negotiation.

The support of Shas, which commands 17 out of the 120 seats in the Knesset, has accorded Sharon wide flexibility with other partners, including Labor. But the budget bill calls for cuts in family allocations that would hit Shas's constituents.

Traditionally, ultra-Orthodox parties have been able to use their political clout to get a much larger share of state funding than other sectors of the population.

"I will not give in," Sharon said, according to media reports. "One must not cave in to the ultra-Orthodox, though one must not give up [on their support]."

But behind-the-scenes, Sharon uses his son Omri as an open channel to Arafat. Mr. Alpher says that it's possible a similar kind of quiet diplomacy could be maintained with Shas.

He also said that Mr. Sharon's tough stances don't mean that he doesn't make short-term deals.

"His compromises are always tactical. His strategic goal is to hold onto the territories and gain Palestinian submission to that," says Mr. Abu Nasser, the political analyst.

In Abu Nasser's view, Sharon's handling of the Shas crisis shows "he wants to prove to everyone that he is firm, not only against the Palestinians but also internally."

Abu Nasser believes that Sharon is also using the crisis to gain the upper hand in the challenge against his leadership from Likud former prime minister Benjamin Netanyahu. "He is showing the right-wing, especially Netanyahu, that he will be the leader until elections, at least."

"We have politicians in Israel, not statesmen," Abu Nasser says. "Everyone is thinking about the next election."

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