"At this time it is not possible to pass a responsible budget,"… (Bernat Armangue / Associated…)
JERUSALEM — Israeli Prime Minister Benjamin Netanyahu announced Tuesday night that he is disbanding his right-wing government and calling for early elections, blaming a coalition deadlock over how to slash nearly $4 billion from next year's budget.
Speculation has been rife for months that Netanyahu's inability to pass a 2013 budget would force him to dismantle what has been one of Israel's longest-serving coalition governments.
Parliamentary elections, which were expected to take place in October 2013, will probably occur by February.
Although most polls suggest Netanyahu and his Likud Party will remain in power, the makeup of his next coalition could change if the budget becomes the driving issue, analysts say.
Amid a recent jump in government spending and a weakening economy, Israel's deficit doubled during the first half of 2012 to $2 billion, causing concern in financial markets in Israel and abroad.
This summer, Netanyahu pushed through tax increases and other austerity measures, but they were enough to provide only a third of the revenue Israel needs to meet its targets.
After several weeks of negotiations, the prime minister said he was unable to reach an agreement with his coalition partners over where to make further cuts. Religious parties objected to reducing government benefits that many of their ultra-Orthodox supporters receive. Military hawks scoffed at proposed cuts to the Defense Ministry.
"At this time it is not possible to pass a responsible budget," Netanyahu said Tuesday in a televised address. He said further increases to the deficit would risk plunging Israel into the kind of economic crisis plaguing some European countries. "I won't let that happen here," he said.
By disbanding the government, Netanyahu is hoping that if he is reelected he will have a renewed mandate to push through the needed cuts or it will allow him to create a coalition that will back him.
Critics, however, said Netanyahu was simply postponing painful, and probably unpopular, economic decisions.
It is the second time this year that Netanyahu has announced the disbanding of his government. In May, he called for early elections amid a political battle over whether to begin drafting religious students into the army.
That election was quickly canceled when the centrist Kadima party surprised everyone by agreeing to join Netanyahu's coalition, a move that was supposed to give the prime minister the political leverage he would need to approve a military draft bill.
Two months later, Kadima withdrew in frustration and the proposed draft law was shelved.
Signs of impending elections were apparent in recent weeks as leading Cabinet members, including Defense Minister Ehud Barak and Foreign Minister Avigdor Lieberman, began appearing to exert their independence and to distance themselves from Netanyahu's policies, apparently in preparation for their own reelection campaigns.
Barak, who is facing an uphill reelection battle after quitting the Labor Party last year, reportedly angered Netanyahu by softening his support for a military strike against Iran's nuclear facilities and by quietly reaching out to Netanyahu's political rivals.
The call for early elections will mean that Israel's parliament, which has been in recess since July, will disband soon as political parties prepare to campaign.
The recently revitalized left-wing Labor Party, which polls suggest will come in second place in the next election, welcomed the announcement as a way to capitalize on its rising popularity.
"Netanyahu is going to elections so that immediately afterwards he can pass a harsh budget that will hurt everyone except the very wealthy," Labor Party leader Shelly Yachimovich wrote on her Facebook page. "The public will choose between two approaches: Netanyahu's and mine. "
At the same time, centrist politicians, including Barak, former Prime Minister Ehud Olmert and former Kadima Chairwoman Tzipi Livni, have been strategizing on ways they might band together to create a platform that could defeat Netanyahu, according to Israeli news media.
Though most Israelis see Netanyahu as the most qualified party leader to serve as prime minister, his approval rating has dropped to as low as 31% in recent months.
Early elections may also help if Israel decides to make good on its threat to launch a military strike against Iran, which Israel says is secretly building a nuclear bomb that might be used against it. Last month, Netanyahu suggested that Israel, which is believed to be the only nation in the region with nuclear weapons, would make a decision about an attack by spring or summer. That's when he said Iran is expected to have enough enriched uranium to build a bomb.
Previously, those close to Netanyahu and Barak hinted that Israel might strike before the U.S. election in November.
The Obama administration opposes a unilateral Israeli strike, contending that international sanctions are working to pressure the Islamic regime. Iran insists its nuclear program is for civilian purposes.