Whether a cynical ploy or sincere desperation, either way Prime Minister Binyamin Netanyahu’s offer of the Finance Ministry portfolio to potential kingmaker Moshe Kahlon on Sunday fizzled on the launchpad.
“If I am the one to put together the government, he (Kahlon) will be part of the coalition. Without regard of the number of seats [he wins], he will get the finance portfolio,” Netanyahu promised on Israel Radio.
In a stinging rejection, Kahlon, a former Likud member whose new centrist party could be a deciding factor in who becomes prime minister, dismissed the offer as pre-election spin. Likud trails Zionist Camp in the polls by about three Knesset seats.
“We’re 48 hours before the election, there was no doubt such spin would come,” Kahlon told Israel Radio. “I didn’t ask for the finance portfolio from Herzog or from Netanyahu. I asked for the finance portfolio only from the public,” Kahlon said, and not a “political appointment.”
Kahlon also recalled the reason for his departure from Likud, which created bad blood with the prime minister.
“Netanyahu had already promised me the Israel Lands Administration (ILA) and the Finance Ministry in the past, but did not keep [his word],” he said. In a remarkable parallel, it was also just two days before elections in 2013, that Netanyahu promised Kahlon control of the powerful ILA.
“It’s not the person, but a manner of policy, and concern for the average man. The public is tired of promises. [The offer] is flattering, but it does not solve the desperate problems of Israeli society,” he added.
Kahlon’s popularity stems largely from his stint as communications minister, when he promoted competition in the cellular market, slashing the prices of mobile telephone services.
However, as Kahlon was turning down Netanyahu, the Israeli financial market was quaking at the thought of Kahlon as finance minister.
Bank shares are falling, as investors begin to take the likelihood of Kahlon’s appointment as Minister of Finance into account, Globes said.
Kahlon has been promising to do in the banking system what he did in the communications sector, namely opening it to competition.
The trauma of Kahlon’s reform in the cellular market caused cellular shares to plunge, and the consequences are still being felt. Globes cited Partner Communications as an example, which has just now had to postpone its payments to suppliers.
But not everyone thinks that Kahlon will spell doom for the banks.
Halman-Aldubi investment house economists wrote, “The falls in the bank shares are due to Netanyahu’s statement that he will appoint Moshe Kahlon as Minister of Finance, whose party platform includes measures aimed at lowering fees in the banking system, a fact that is expected to have a negative impact on the banks’ profits.”
Barak Investment House analyst Lior Kedar saw it differently:
“Despite the threat to the banks posed by Kahlon, the market also realizes that reform involved is not of the same scope, and it will therefore take time before the sector feels Kahlon’s hand as Minister of Finance, if it ever does,” said Kedar.
“It is reasonable to assume that even Kahlon, should he become Minister of Finance, will have more urgent matters to attend to during his first year. Therefore, despite today’s drop in the bank shares, no long-term trend is involved. If anything, a buying opportunity has been created here, which should be exploited before things get back to normal.”