Rightists Threaten to Collapse Israel’s Coalition

Finance Minister Yitzhak Modai offered Wednesday to resign in a bid to save Israel’s fragile ruling coalition. But hours later, his political allies said they could not accept the gesture and that if he goes, they will all quit, bringing down the government.

The dramatic series of events grew out of Prime Minister Shimon Peres’ demand Monday that Modai resign over remarks he had made criticizing Peres. And they set the stage for a showdown at next Sunday’s scheduled Cabinet meeting between the two major coalition partners, Peres’ centrist Labor Alignment and the rightist Likud Bloc, of which Modai is a member.

Peres “must know, without the slightest doubt or hesitation, that if he insists on this decision and tries to fire or cause the resignation of the finance minister, the Likud will not participate in this government, and the government will be dismantled,” Likud leader Yitzhak Shamir said in a meeting of his party’s members of Parliament on Wednesday afternoon.

‘Fine, Patriotic Stand’

Shamir called Modai’s position “a fine, patriotic stand” but added that the party “doesn’t accept this stand of the finance minister.”

Peres insisted in a television interview Wednesday night that “I will go through with what I said. It’s a matter of credibility.”

The prime minister said he does not want to break up the so-called national unity coalition government, although he is under considerable pressure from within his own party to do so. If the government survives, he and Shamir, who is currently foreign minister, are scheduled under the coalition agreement to change jobs next October.

Labor Alignment activists urging Peres to scuttle the government point to the sharp rise in his standing in the public opinion polls, and they argue that he could win enough of a plurality in new elections to form a less broad-based, more ideologically homogeneous government.

Moral High Ground

Wednesday’s developments appeared to represent a scramble for the moral high ground among all the parties involved while leaving the next critical move up to Peres. Should the relatively popular national unity government collapse, the public’s perception of who caused the breakup could be crucial in any new elections.

While the big political blocs appear to have locked themselves into a showdown, it is still possible that one or the other could back down between now and Sunday, causing the crisis to evaporate like so many others during the 19-month life of the coalition.

Peres could still find some pretense to allow Modai to remain as finance minister. And even if he does not, it remains to be seen whether the other Likud members of the Cabinet will carry out their threat to quit in support of Modai.

“I’m not quite sure that this is a final decision by the Likud,” said Economic Planning Minister Gad Yaacobi, a Labor Alignment member. “It can be the final decision; it can be an interim decision; it can be a tactical decision. Who knows?”

‘There’s Still Time’

“There’s still a lot of time before Sunday, and I hope that in the end, the will of the people and the responsibility of those (in power) . . . will prevail,” commented Zevulun Hammer, secretary general of the National Religious Party.

The stand of the NRP and three other small religious parties, which often hold the balance of political power here, could be critical to any Labor hopes of forming a narrow ruling coalition without Likud. And all of them publicly support continuation of the national unity government.

Modai, who has clashed previously with Peres over who should get credit for an economic policy that has reduced Israel’s inflation rate to about 25% annually from over 400%, triggered Wednesday’s political scramble with his surprise announcement at an 11 a.m. news conference.

Addressing a standing-room-only crowd of newsmen summoned on short notice to his office, he declared: “I am convinced that the people do not want this step, and yet this is what is demanded. If Prime Minister Peres wants it to be so, I will return the Finance Ministry portfolio to him, and this will be my contribution to the nation.”

‘Flying Prime Minister’

Peres had demanded Modai’s resignation after weekend interviews in which the finance minister called the much-traveled Peres a “flying prime minister” who knows little about economics and squanders government funds to save institutions closely linked with Labor.

Modai said he had not consulted his Likud colleagues before making his announcement, and he refused to say exactly when he would submit his resignation, all of which suggested that he was forcing the hand of his allies in the Cabinet.

After hastily called meetings in the afternoon, the Likud members of the Cabinet, who are themselves caught up in a bitter party leadership struggle, responded with unaccustomed unanimity.

“The only thing I can say is that we will not stay in the government even one hour if Mr. Modai will be forced out of the government,” commented Trade and Industry Minister Ariel Sharon, who is a rival of Shamir for the Likud leadership.

Levy Hurries Home

The other principal contender for the top party spot, Deputy Prime Minister David Levy, cut short a visit to Canada to hurry back to Israel on Wednesday.

The Likud Cabinet ministers contend that Peres’ move clearly violates the coalition agreement, which stipulates that the prime minister cannot fire a minister of the other major party without the agreement of that party’s leader. Since Shamir refused to go along with Modai’s dismissal, they say, Peres’ hands are tied.

Moshe Arens, a minister without portfolio and Likud member, responded, “Absolutely; there’s no question about it,” when asked if he and his colleagues would quit in support of Modai. “If the prime minister insists on violating the agreement on the basis of which this government was set up, this government is going to fall apart.”

Amendment to Accord

Peres contends that while the original coalition agreement does prohibit unilateral action such as he contemplates, that pact was effectively amended in the wake of a similar government crisis last November.

At that time, it was Sharon who made remarks critical of Peres, violating the so-called “principle of collective responsibility,” which says that once a decision is made, all ministers must support it, even if they opposed it during discussion.

Sharon later disclaimed some of the remarks attributed to him and apologized for others, and Peres withdrew his threat to fire him. But Peres also sent a letter to all ministers at the time saying he would not compromise the principle again.