Minister of Finance Benjamin Netanyahu has resigned from the government due to his opposition to Israel's disengagement from the Gaza Strip. The Tel Aviv Stock Exchange responded violently to the news, and dropped over 4% during the last hour of trading.
News agency AFP reported that Netanyahu resigned shortly before the cabinet vote to give the final go-ahead on the pull-out of a first batch of Gaza settlements.
In recent weeks, Netanyahu made clear his opposition the disengagement, and had already announced that he planned to vote against the plan.
In his letter to Sharon, Netanyahu said he opposed unilateral withdrawal without something in exchange, which he believed would strengthen terrorist organizations. “I remained in the government all this time, despite my growing opposition to the withdrawal, which I oppose. I did this out of responsibility for my job as minister of finance. I was in the midst of leading a reform and privatization revolution unprecedented in Israel, which strengthened the economy and country.”
It is not clear at this time whether Netanyahu will participate in the cabinet discussion and vote on the 2006 budget, scheduled for Tuesday.
The leading candidates to replace Netanyahu are Minister of Transport Meir Sheetrit, who has served as minister of finance before; Minister of Education Limor Livnat, who also opposes the disengagement plan; and Minister of Justice Tsippi Livni, a former director general of the Government Companies Authority who is playing a key role in the disengagement.
Political sources in Jerusalem said the markets would probably find their equilibrium quickly. They said Governor of the Bank of Israel Prof. Stanley Fischer was an anchor of financial stability. The working assumption is that Israel’s foreign credit rating will not be downgraded.
"I completed the reforms and now can permit myself to resign from the government," Netanyahu said this evening at a news conference about his surprise resignation late this afternoon.
Netanyahu said that he was stepping down because he disagreed with plan for unilateral withdrawal from the Gaza Strip. Asked whether he believed that his actions would stop the disengagement, Netanyahu said that they would not. "But I am the son of a historian. I want people to be able to say in ten years, 'He was not party to this.'"
His absolute distaste for disengagement, Netanyahu said, was paralleled by his absolute belief in economic reform, which he said was well on its way. "In the same way that the TASE plummeted today, as soon as it knows that the economic policy is going to continue, it will rise again.
Published by Globes [online], Israel business news - www.globes.co.il - on Sunday, August 07, 2005