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Prime Minister Netanyahu May Keep Defense Ministry for Himself

By DEBKAfile

Israel politics are in for a major shakeup. New faces will dominate the next cabinet under Binyamin Netanyahu, while 52 of the 19th Knesset members are new and more youthful faces. Netanyahu is pondering keeping responsibility for defense,DEBKAfile disclosed. This would upset outgoing Vice Prime Minister Moshe Yaalon's expectation of defense in the post-election Netanyahu government.

Since the results of Israel's general election of Tuesday, were out, Netanyahu (whose Likud-Beitenu garnered only 31 seats) has been locked in intensive negotiations with Yair Lapid, whose party came second with a stunning 19 seats, on the shape of the next government. They have also discussed inviting retired defense minister Ehud Barak to stay on as a non-political expert.

For now, DEBKAfile reports, Lapid who is in a position to pick and choose the cabinet post he wants, has turned down the post of finance minister for himself, while admitting to his friends that he wouldn't say no to the foreign ministry.

Upon hearing this, ex-Foreign Minister Avigdor Lieberman, said cynically Wednesday that the finance ministry was right down Lapid's street in view of the strong social and economic agenda to which he committed his Future party. His party might resent his abdication of those goals, Lieberman commented. Wednesday night, Lapid himself put paid to a chorus led by Labor's Shelley Yacimovitch for his Future to join the left-of-center and the Arab parties to block Netanyahu's efforts to build a coalition government.

Instead, he welcomed Binyamin Netanyahu as next prime minister. "I was glad to hear Netanyahu referring to all the things I have been aiming for," he said to reporters. There will be no opposition bloc - certainly not with Hanan Zouabi," said Lapid.

Netanyahu, speaking after the elections, spoke favorably of some of the objectives Lapid's Future had set itself: Starting with averting the Iranian nuclear threat, he went on to speak of equalizing the burden between the secular and ultra-religious communities, bringing down prices, providing affordable housing and reforming the system of government. Lapid refrained from answering when he was asked whether he would serve in the same cabinet as the ultra-religious Shas party (11 seats), which is a longstanding coalition partner of Likud and with which Netanyahu conducted separate negotiations Wednesday.

This dual track opened up the possibility of establishing a government led by Netanyahu and Lapid in two stages: In the first, this duo would be joined by the pro-settlement Jewish Home and its head, the high-tech millionaire Naftali Bennett (11) and Kadima led by Shaul Mofaz, which Wednesday night was poised to scrape past the threshold with two seats. This setup would command a slim majority of 63, enough to get the 2013-2014 state budget passed by the new Knesset. This task defeated the outgoing government because some of its provisions were unacceptable to Shas and so triggered the early election.

After that, Shas would be invited to join the government on the basis of the guidelines established in stage one, and expand its parliamentary majority to 75. With Torah Judaism (7) aboard too, the third Netanyahu government would command a comfortable 82

Bennett expects his Jewish Home party to win a 12th seat when the army ballots are counted before official election results are released Thursday. He would be strongly in line for one of the economic portfolios in the new government, commerce and industry, for instance, or even finance.

Tzipi Livni, whose Hatenuah Party fell far short of her expectations and wound up with 6 seats, has been after Lapid to set up a joint front for the cabinet negotiations with Netanyahu. She anticipates his gaining the post of acting or vice prime minister plus a key cabinet post. She would then walk through the door to her former post as foreign minister, or so she hopes.he Future party leader and the incoming prime minister have not commented on this plan.

Want to Buy a Home in Israel? Better Get Yourself a Large Fortune

By Ha'aretz

Housing prices are so high that the prime minister highlighted his efforts to bring them down by saying less than 48 hours before polls opened that he would name Moshe Kahlon - who gained fame as the minister who led the shake-up of the cell phone industry - as chairman of the Israel Lands Administration.

If Kahlon eventually takes the job, the extent of his challenge is easily illustrated by the latest International Housing Affordability Survey, which compares home prices in urban areas around the world. The survey, done by the U.S. organization Demographia, uses a very simple rubric to determine housing affordability: the "median multiple," that is, the median house price in the area under study, divided by the gross (before tax) annual median household income in the same area.

At its simplest, a grade of up to 3 - meaning that one can buy a home for the equivalent of three years of one's annual pre-tax income - means you are talking about affordable housing. Any grade above 5.1 is considered to be "severely unaffordable."

The survey focused mainly on English-speaking countries: the United States, Australia, Canada, Ireland, New Zealand, the United Kingdom and Hong Kong. The most expensive of these turned out to be, not surprisingly, Hong Kong: a small, crowded and wealthy island whose median multiple was around 13.5 - in other words, off-the-scale expensive when it comes to purchasing a home. The United States and Ireland, after a 50% plunge in home prices from their respective peaks, turned in "moderately affordable" median multiples of 3.1 and 3.2, respectively. In New Zealand, one of the least crowded countries on the planet, the multiple median for housing prices is nevertheless a "severely unaffordable" 5.3.

And Israel? Since Israel was not included in the Demographia survey we tried to do our own calculation of the multiple median for housing prices here. According to National Insurance Institute figures for 2010, the median monthly pre-tax income in Israel per person is around NIS 5,500 ($2062), and NIS 9,800 per household, or NIS 117,600 a year ($31,528).

The median price of an apartment in Israel is slightly under NIS 900,000 ($241,286). That puts the multiple median at 7.7, higher than the 7.2 at which Israeli was pegged using data from 2009. Israel is not yet as expensive as Hong Kong, but relative to Demographia's international study, home prices here are insane.

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