Israeli Officials Swap Jobs, End Cabinet Crisis

Times Staff Writer

An 11th-hour agreement on an exchange of Cabinet portfolios Sunday night averted the collapse of Israel’s fragile coalition government, but not before the political crisis--widely viewed here as an artificial one--had damaged the image of both major coalition partners.

A Jerusalem Post columnist described the affair Sunday as “an insult to the nation’s intelligence” and “a nadir in the country’s political morality.”

The compromise settlement, under which Finance Minister Yitzhak Modai and Justice Minister Moshe Nissim switched jobs, ended a crisis that began a week ago when Prime Minister Shimon Peres demanded Modai’s replacement because of remarks critical of Peres that Modai had made in two published newspaper interviews.

Ministers approved the change at a thrice-postponed Cabinet meeting, which finally began at 10 p.m. local time Sunday and broke up just 20 minutes later.


As he emerged from the session, Peres was asked who won and who lost. “I don’t know--we are not at a football game,” responded the prime minister, who heads the centrist Labor Alignment. “But that (Modai’s removal) was my original demand, and the minute it was met, the crisis was over.”

Peres said the affair established “that a minister must be part of the collective responsibility of the government. He cannot participate in a Cabinet that makes a decision, and later on to criticize it. The minute he does so, he has to draw conclusions"--a euphemism meaning he must leave his post.

Last week, ministers representing the rival Likud Bloc had vowed to resign en masse if Peres tried to force Modai, a Likud member, out of the Finance Ministry. However, Trade and Industry Minister Ariel Sharon, a Likud member, said Sunday night that his party had made concessions “just in order to be able to preserve the national unity government,” which he said the country needs.

A Popular Figure


Modai, an economist, is the country’s most popular finance minister in years, with approval ratings in public opinion polls rivaled only by those of Peres. Despite their political differences, the two men had collaborated on an austerity program that drove the country’s inflation rate down from an annual 450% to about 25% a year. But in recent weeks they broke sharply over the future course of government economic policy.

In the offending interviews, Modai called the much-traveled Peres a “flying prime minister” who knows little about economics and squanders government funds to save institutions closely linked to his Labor Alignment.

Sunday’s shuffle puts Nissim, who admittedly knows little about economics, in charge of the Israeli treasury while non-lawyer Modai takes over the Justice Ministry.

Asked after Sunday’s Cabinet meeting if he considered that sort of change in the national interest, Peres said: “I don’t think that a minister is a professional matter. A minister, as a minister, has political responsibility. He is being supported by professionals.”


‘Everybody Looks Bad’

However, another senior government official commented: “I think we got rid of an excellent finance minister, and we got rid of an excellent justice minister, and we get a bad new finance minister and a bad new justice minister.

“Everybody looks bad,” this official added. “The public does not like what is going on here.”

“The crisis had nothing to do with the good of the nation and everything to do with the power struggle between the Labor Party and the Likud,” wrote Jerusalem Post columnist Roy Isacowitz.


“The preposterous posturing by leaders of both parties, as if they were defending the nation’s norms and ethics, is an insult to the nation’s intelligence,” Isacowitz added. “They treated the people with disdain.”

Forming the political backdrop for the crisis is a unique rotation clause in the coalition agreement between Labor and Likud under which Peres and Foreign Minister Yitzhak Shamir, the Likud party leader, are scheduled to switch jobs in October. Peres has been under considerable pressure from Labor to avoid the necessity of rotation by bringing down the government, then using his current popularity to win a large enough plurality in new elections to form a narrow, Labor-led government.

Peres has insisted repeatedly that he intends to go through with the rotation as long as the rest of the coalition agreement is respected. And while Likud appears to be in the weaker political position, the so-called national unity government enjoys enough popularity that many analysts consider it a big risk for Labor to be seen as purposely undermining the coalition.

Likud officials nevertheless accused Peres of using Modai’s remarks as a pretext, even though the finance minister’s comments were no more insulting than those used by other Cabinet ministers from time to time.


Matter of Principle

Peres said he acted as a matter of principle and had in mind a similar government crisis last November, when Sharon criticized him. Peres, who threatened to fire Sharon at that time, backed down when Sharon denied some of the remarks attributed to him and retracted others. But the prime minister said he would not countenance any further attacks from within his own Cabinet.

Ironically, it was reportedly Sharon who first proposed a Cabinet shuffle as a compromise in the latest crisis. And by midweek it had appeared that a deal was virtually sealed under which Modai and Foreign Minister Shamir would trade jobs.

Likud sources insist that Peres had agreed to this arrangement because it left open the opportunity for him to take over the Finance Ministry himself after the rotation in October. The treasury post would give him enormous control over the government purse strings, control that could be used to Labor’s advantage before any new elections.


A Peres aide insisted Sunday that although the prime minister was offered such an arrangement, he rejected it “because he didn’t want to be seen as somebody who did the whole crisis in order to become minister of finance.”

No Satisfactory Explanation

However, another government official close to the negotiations insists that Peres agreed. And none of Peres’ aides ever explained satisfactorily how, if he could not tolerate Modai as finance minister, he could work with him as foreign minister.

In any case, the proposed Shamir-Modai switch fell apart when Likud’s second-ranking official and a rival for the party leadership, David Levy, returned from a trip to Canada. Levy objected violently to Likud’s losing the finance portfolio and strongly criticized Shamir for agreeing to such a deal. At the same time, however, Levy reportedly suggested that he take over the treasury himself.


The political jockeying continued until the end, causing Sunday’s regular Cabinet meeting to be delayed three times as Likud and Labor ministers met separately for strategy sessions.