As the coronavirus pandemic takes hold in Israel, its political factions are being forced to consider once unthinkable compromises to put the country on the right footing against the mounting existential threat. On March 16, Israeli President Reuven Rivlin officially tasked Blue and White party leader Benny Gantz with forming a government in the next 28 days. Gantz has since pledged to create a national unity government, which, compared with the country's current caretaker government, would have more political strength and legal authority to quickly and sufficiently mitigate the anticipated economic fallout of the coronavirus crisis. 

Indeed, Israel's current quarantine efforts — most of which have only been used during wartime — are already estimated to cost the country 3 percent of gross domestic product (GDP) growth in 2020. But even with this new pandemic-induced sense of unity, a makeshift government will unlikely be strong enough to prevent additional coronavirus-induced unrest in the West Bank, let alone outlive the current pandemic. Thus, once the health crisis of coronavirus slowly recedes, Israel's political crisis will likely once again take the fore. 

Extreme Measures

Even with its current caretaker government, Israel has already taken strident measures to slow the spread of coronavirus. On March 19, Prime Minister Benjamin Netanyahu ordered Israelis to severely limit their movement and to only go outside when absolutely necessary. In addition to implementing nationwide school closures through at least the last day of Passover on April 16, the country has also essentially shut down its tourism industry by shuttering religious sites and demanding all travelers self-quarantine for 14 days upon returning home. It also recently banned groups of more than 10 people from gathering to further strengthen social distancing and curb the spread of the virus.

Such strict quarantine efforts, however, are already taking a sharp toll on Israel's economy, and in particular, its tourism industry. The most immediate impact so far has been the rapid decline of tourists in recent weeks: Only 22,000 tourists visited the country on March 16, compared with 52,000 that visited on March 1. And these drops are expected to continue ahead of the important Passover and Easter religious holidays in April, which normally see a surge in religious pilgrimages. As a result of this loss of tourism, 24 percent of Israel's hotel workers have already been placed on unpaid leave, and 53 percent of the country's travel agency workers have either been laid off or put on leave as well. Israel's national airline, El Al, has already had to cancel most of its flights and suspend 80 percent of its workforce due to plummeting demand and travel restrictions, in 35 percent of the country's airport workers, meanwhile, have so far been put on unpaid leave as well. 

Coronavirus outbreaks in other parts of the world risk further exacerbating the domestic economic fallout of coronavirus, as Israel's key trade partners reckon with their own quarantine-induced financial troubles. The high-tech companies that make up Israel's large start-up scene (and 30 percent of the country's GDP), in particular, could see their bottom lines hurt as top markets in the United States and Europe slide into their own recessions. In a recent survey, up to one-third of all Israeli tech companies said they anticipate layoffs due to the pandemic. 

To offset this economic fallout, the country's central bank announced it will purchase government bonds to boost liquidity. Netanyahu also recently unveiled a $2.7 billion loan package for businesses affected by the coronavirus. This is likely just the beginning of stimulus measures and other government relief efforts, especially as global economic conditions worsen.

An Unstable Unity Government

Israel’s political factions will face a new, heightened pressure to unite in the face of these looming health and economic threats. Should Gantz and his Blue and White Party be able to pull together an emergency unity government by mid-April, it will likely also include other major factions and their leaders — namely, Benjamin Netanyahu of Likud and Avigdor Lieberman of Yisrael Beitenu. These factions would then be given the power to get Israel through the current coronavirus crisis with greater legitimacy compared with the country's current caretaker government. Such a collection of factions would break the political paralysis of the past year for a time, and nudge Israel back towards centrism. 

With the country focusing its political energy on managing the coronavirus, Israel's drift toward more a nationalist political system will likely slow, along with the recent right-wing push to rapidly annex the West Bank. This will, in turn, also give center-left factions a much-needed chance to restore its legitimacy through governance. Other polarizing political debates, such as the ultra-Orthodox's role in the Israeli military and Prime Minister's Netanyahu corruption record, will also likely fall to the wayside for now. Indeed, Netanyahu's trial has already been delayed by two months due to the coronavirus crisis. 

But an emergency unity government would also have the increasingly tall order of monitoring the Palestinian Authority's coronavirus response in the West Bank. The Palestinian Authority is already seeing a significant economic decline due to Israel's coronavirus efforts. Roughly 100,000 Palestinians cross into Israel each day for employment, but quarantine measures have already cut many Palestinians off. Compared with Israel, however, the Palestinian Authority has far fewer financial tools at its disposal to stimulate its economy, as well as a limited healthcare system to contain a widespread outbreak within its borders. By further destabilizing the Palestinian Authority, the coronavirus crisis risks worsening already bubbling unrest in the West Bank due to Israel’s recent annexation push and internal Palestinian factionalism. An emergency unity government in Israel, however, might be too divided to provide the support needed to sufficiently mitigate this security threat, with its center- and far-right factions still wanting to weaken and isolate the Palestinian Authority in preparation for further annexation efforts. 

Indeed, temporarily ending the political paralysis of this era would slow — but not stop — Israel's ideological transition toward the nationalist, right-wing end of its political spectrum, which is being imposed by deeper demographic and cultural trends that the coronavirus virus will not wholly upend. A unity government would still have strong internal divisions between its secularists, centrists and religious parties, meaning its unlikely to survive for very long past the outbreak. Once the emergency begins to ease, any single faction could threaten to bring down the government to try to win concessions, which will likely ultimately topple Israel right back into the political chaos it was before the coronavirus — with Israel continuing on its path toward nationalism.