Israel: Stage set for early elections

Israel’s new Labour Party leader, union boss Amir Peretz, on yesterday said he will move quickly to pull the party out of the governing coalition, setting the stage for early elections.

Peretz captured the party leadership early yesterday with a shocking victory over party stalwart Shimon Peres in a nationwide primary. The takeover of Labour, a bastion of the European-born elite, by the Moroccan-born Peretz was hailed as a watershed moment in Israeli politics.

Peretz yesterday promised to “separate” Labour from Prime Minister Ariel Sharon’s government and return to the opposition. He is much more dovish than Sharon in dealing with the Palestinians and also has opposed the cuts in social spending by the current government.

“The ability of the Labour Party to become an alternative to the rulers can be fulfilled only if we return to ourselves. The dependency on the Likud distorts the identity of the Labour Party,” he said.

Peres led Labour into a coalition with Sharon’s hard-line Likud Party this year to provide the support necessary to withdraw from the Gaza Strip. Withdrawal opponents in Likud had threatened to stop the plan, and without Labour, the pullout would have likely failed.

With the withdrawal completed, Peretz says there’s no reason for Labour to stay in a government he accuses of pursuing unfettered capitalism.

Sharon called Peretz to congratulate him, and Peretz proposed a meeting next week to discuss early elections. The next elections are scheduled in November 2006, but with Likud still divided, a Labour defection could force Sharon to call an early vote.

The surprise victory by Peretz, 53, reflected deep discontent with the country’s European-descended elite, which founded Labour and has dominated the party from the outset. Peretz, who grew up poor in an outlying Israeli desert town, has now wrested control of that elite’s most hallowed institution.

Politicians and commentators deemed the upset victory as Israel’s biggest political development since 1977, when Labour first lost power after 29 years of unchallenged rule. ”It’s not an upheaval, its a revolution,” political commentator Daniel Ben-Simon said.

Peretz could face a difficult time returning Labour, which has embraced free-market policies in recent years, back to its socialist roots. Peretz tried to reassure his opponents yesterday that the economy would be in good hands under his watch.

“I don’t intend to damage the free market and competition. But I intend that the free market in Israel will be a market that will serve people and the competition will be fair, such that won’t turn us into a jungle in which people lose their ability to survive,” he said.

Peretz may also struggle in selling his peace policies to security-conscious Israelis. The union leader, best known for organising crippling nationwide strikes, has held no leading political role and can boast no storied military career.

This background could put the already flagging party at a disadvantage against the popular Sharon, a retired general, in national elections.