Kahlon quits politics for business

Communications Minister Moshe Kahlon may team up with Kobi Maimon, the controlling shareholder of Tamar partner, Isramco.

Likud party sources believe that Minister of Communications Moshe Kahlon will go into business within months. He may team up with an associate, Kobi Maimon, the controlling shareholder in Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), which is a partner in the Tamar gas discovery and other licenses. Kahlon will probably take some of his advisers, who have worked with him in the Knesset for years, to his new job.

The Likud is concerned by the loss of Kahlon. The day after his unexpected announcement that he is quitting politics, party sources believe his departure could cost the party several Knesset seats in the upcoming elections. The sources say that the departure of Kahlon, the government's most popular minister, is a blow to the party. Kahlon, who also holds the Social Affairs portfolio, is considered the Likud's social symbol, and he was supposed to lead the party's election campaign. Top party officials fear that the absence of Kahlon, who is responsible for the government's few successes, and is also one of the party's only two Sephardi ministers, will cause long-term electoral harm to the party.

If Kahlon's statement that he intends to only take a time-out from politics is true, he will have to maintain his public and political connections. His aides say that he has ended his voluntary work with the NPO There's Hope, which is seeking to change Israel's electoral system.

Netanyahu has lost his winning economic card

At a stormy Likud party meeting today, Kahlon offered his first response to his departure from politics, saying that the full support of Prime Minister Benjamin Netanyahu enabled him to carry out the reforms in the telecommunications market. "I served six years in the Knesset and four years in the government. Every night, I went to sleep with Israel's people and I woke up with Israel's citizens. I worked for everyone. We initiated a consumer revolution, which has benefited the people. I want to say unequivocally: were it not for the full support of the prime minister, for whom I walked the socioeconomic road, we could not have succeeded in bringing this about. We needed such a prime minister to led the reforms so that Israel's people could benefit from lower prices and free competition," he said.

Kahlon reiterated the need for free competition, job creation, and a market economy. "It's the only way, and there is no middle road. It's the way of the Likud. This is the most social government I know, at least in the past ten years. The Netanyahu government will be reelected to continue this path," he said.

Likud sources believe that Netanyahu will try hard to make the elections agenda about defense, and it would not be surprising if economic issues disappear from the agenda, because without his winning card - Kahlon, Labor Party chairwoman MK Shelly Yachimovich will have the upper hand.

Netanyahu fears Kahlon

Although Kahlon met Netanyahu several times over the past month and told him of his intentions, the Prime Minister's Bureau grasped the importance of Kahlon's departure only after last night's announcement. In recent months, Netanyahu's aides spared no effort to insinuate that Kahlon was undermining him. Netanyahu bought his aides' goods, despite Kahlon's denials that he would one day run for prime minister. This is also the source of the rift between Netanyahu and Kahlon over Channel 10, a rift that widened when Kahlon voted against the austerity package in late July. Kahlon, the only Likud minister to vote against the package, was accused by Netanyahu's aides of trying to make a name for himself at Netanyahu's expense.

It is no surprise that Netanyahu is now trying to hug Kahlon. Last night, the Prime Minister's Bureau issued a statement that Netanyahu would try to keep Kahlon in the Likud, but if Netanyahu had really wanted that, he would have found time over the past month to do it.

During the confrontations with Netanyahu, Kahlon never concealed his apprehension that the prime minister would exploit him and his popularity for the election campaign, only to give him a worthless portfolio afterwards, out of fear that Kahlon would grow stronger at his expense. This may be one of the reasons why Kahlon has quit politics at this time. In any event, Kahlon's October surprise heralds that the road to the polling booth is still wide open.

Published by Globes [online], Israel business news - www.globes-online.com - on October 15, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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