Sharon and Peres fail to reach coalition govt deal
Israeli Prime Minister Ariel Sharon and opposition leader Shimon Peres have failed to reach a final agreement on bringing the Labour Party into the government, a prerequisite to push through the withdrawal from the Gaza Strip.
Sharon, who lost his majority in parliament this summer after some coalition allies quit over the Gaza pullout, needs the moderate Labour for his planned withdrawal from Gaza and four West Bank settlements by the end of 2005.
Sharon and Peres, long-time rivals but also occasional political partners, failed last night to work out disagreements over the proposed 2005 state budget. Peres’ Labour Party agreed to attend another round of coalition talks today.
Sharon and Peres have reached preliminary agreement on the terms of the Gaza pullback, but remain stuck on economic issues. One Labour Party member described the government’s economic policies as “piggish capitalism”.
Peres said his party wants bigger budget allocations for pensioners and regional councils, which suffer from severe deficits and have not been able to pay their employees for months.
“If they want to form a government without us, they can. In my opinion that will not be a government that supports disengagement,” Peres said, referring to the Gaza pullout plan. “If they want a government that supports disengagement they can’t do it without us.”
Finance Minister Benjamin Netanyahu – who reportedly opposes a Sharon-Peres alliance – added to the tensions yesterday when he presented his budget, with €1bn in cuts, including welfare spending.
Netanyahu is Sharon’s main rival in the ruling Likud Party, and economic analyst Nehamia Strasler suggested the finance minister’s main purpose appeared to be to derail a Sharon-Peres alliance.
