Netanyahu scrambles to counter economic protests

The move signaled the depth of the political challenge to Netanyahu posed by the grass-roots protest movement, which has swept up tens of thousands across Israel and shattered a sense of public complacency in the three weeks since a tent encampment sprouted in Tel Aviv to protest rising rents and housing prices.

“A new country,” proclaimed Israel’s most widely read newspaper, Yediot Ahronot, in a banner headline over an image of the throng of protesters — estimated at more than 200,000 — that packed a major thoroughfare in Tel Aviv on Saturday night, one of several protests in cities across the country.

Fueled by middle-class discontent with rising living costs and resentment over what many see as inequitable distribution of wealth in Israeli society, the demonstrations have grown each week, with Saturday’s protest one of the largest ever in Israel.

The cries for “social justice” have signaled a shift from the traditional preoccupation with security and the Arab-Israeli conflict to an economic agenda focusing on issues often shunted aside in the face of what have been presented as more pressing external threats.

In public remarks before the weekly meeting of his cabinet, Netanyahu pledged to find “real solutions” to what he acknowledged was the “genuine hardship” of many middle-class Israelis who complain that costs of housing, food, fuel and child care have outstripped their incomes.

Netanyahu said the appointed panel, headed by prominent Israeli economist Manuel Trajtenberg, would hold a “genuine dialogue” with representatives of the public, with the goal of submitting recommendations to the government next month.

Finance Minister Yuval Steinitz told Israel Radio that although efforts would be made to lower the cost of living, break up monopolies and initiate tax reform, the government would “maintain the economic frameworks” that had promoted growth and low unemployment while avoiding the debt that has plagued the United States and some European nations.

But beyond the protesters’ specific demands — such as affordable housing, the expansion of free education and tax reductions — the demonstrations have reflected a reawakening of civic participation and a desire for greater government intervention to resolve social inequities after years of free-market reforms championed by Netanyahu.

An Israeli public that had seemed apathetic and self absorbed— numbed by the intractable conflict with the Palestinians and disillusioned with its political leadership — has filled the streets, fueled by the energy of young activists who have shunned established political parties.

On the morning after Saturday’s protests, which were huge for a country of 7.7 million people, newspapers were filled with celebrations of what Mordechai Haimovich, a columnist in the Maariv newspaper, called “the renaissance of the Israeli spirit.”

Steinitz, the finance minister, paid tribute to what he called “a very impressive protest,” adding, “there is something beautiful in that people care.” And Gideon Levy, a columnist in the Haaretz newspaper, saluted what he said was “the Independence Day of a people . . .that has woken from its winter and summer slumber.”

The protests have demanded a revival of social solidarity as a counterweight to Israel’s move in recent decades from a socialist-style economy to free markets and privatization, with wealth concentrated in few hands. Demonstrators carry signs calling for the restoration of the welfare state and putting “people before profits.”

At Saturday’s demonstration in Jerusalem, a protest leader called for the “renewal of the [social] contract between the people and the state.”

In a front-page essay in Haaretz last week, Amos Oz, Israel’s most prominent author, said the protests were “a delightful revival of mutual fraternity and commitment.”

Perhaps the most telling sign of the changing priorities is a slogan appearing on many protest banners. A phrase traditionally used in times of war, it has now become a rallying cry for the cause of affordable housing for ordinary Israelis.