Israel PM Forms Panel to Quell Protests

Binyamin Netanyahu, the Israeli prime minister, has announced the formation of a committee to look into the soaring cost of living after a quarter-million people marched in one of the biggest protests in the country’s history.

The Israeli PM said on Sunday that the committee, headed by Harvard-educated Israeli economist Manuel Trajtenberg, would hold "a broad dialogue with various sectors in the community".

Netanyahu, a champion of free market reform, announced the appointment of the committee of experts at the weekly cabinet meeting to propose socio-economic reform.

But holding out the prospect of "major change", he cautioned he would "not be able to satisfy everyone".

"Over the past few weeks, we have witnessed a public protest that expresses real hardship," he said.

While Netanyahu’s governing coalition faced no immediate threat, a summer of discontent in Israel has underscored the potential electoral impact of a burdened middle class rallying under the banner of "social justice" and rewriting a political agenda long dominated by security issues.

In under a month, the popular protest movement has swollen from a cluster of student tent-squatters into a diffuse, countrywide mobilisation of Israel’s middle class.

"This [movement] really is reaching across Israeli society," Al Jazeera’s Cal Perry said, reporting from the tent city in central Tel Aviv. "What people will tell you is that the middle class is slowly disappearing."

"The prime minister has formed a committee to take a look at what exactly the protesters want. The president said a few days ago that these are legitimate demands that the protesters have … And it’s going to take a financial burden on this country."

Itzik Shmuli, a protest leader, welcomed Netanyahu’s round-table initiative. But, he told Israel Radio: "I want to be sure … We will not be given the runaround for three months, at the end of which we will not emerge with real solutions."

Mark Regev, a spokesman for the Israeli prime minister, told Al Jazeera that Israel has a long tradition of peaceful protests and that the demonstrations would not turn violent.

"What is new about these demonstrations is the simple volume, they are so large, and we take them seriously. We take the concerns raised by protesters seriously and we think prices of housing and many consumer products are much too high," he said.

"The government is committed to lowering the high prices through enhancing competition, as we have too many monopolies and cartels in Israel."

Hundreds of thousands of demonstrators poured into the streets of Tel Aviv and other major Israeli cities on Saturday night to protest against the increasing cost of living, in a big show of force by a movement that is sweeping the country.

About 300,000 mostly middle-class Israelis marched through the streets in central Tel Aviv, waving flags, beating drums and chanting: "The people demand social justice".

A similar protest last weekend drew an estimated crowd of 150,000 nationwide.

Many observers viewed Saturday’s protest as a test to see if the movement was gaining momentum or fizzling out.

Protesters paid homage to the uprisings taking place across the Arab world, waving banners reading "This is Egypt" and making reference to Cairo’s Tahrir Square, where Egyptian protesters gathered during their uprising.

The movement further expanded as many groups later joined in over a wide range of economic issues.

"This started out as a housing crisis when a young woman was evicted from her flat when she couldn’t afford her rent," Ron Kampeas, Washington bureau chief at the Jewish Telegraphic Agency, told Al Jazeera. "But it’s ballooned and encompasses much more than that now."

"There was planned privatisation of what was once a socialist economy, and there weren’t adequate plans to bring along the middle classes and lower-middle classes, as a new wealthy class arose in Israel."

The popular movement has snowballed into the biggest internal threat yet for the right-leaning government. Polls released last week show Netanyahu’s approval ratings have dropped, while support for the protesters is very high.

Israeli spokesman Regev told Al Jazeera "the problem is, the middle class and working class are suffering as prices are simply too high. We need to find ways to loosen the burden on those middle and working class and I think we can do it".

"This is not about left or right, this is not about one or the other political agenda. This is about lowering prices on Israeli consumers."

Income Inequality

Netanyahu has announced a series of bureaucratic reforms, including freeing up land for construction and offering tax breaks.

But the reforms thus far have only increased anger in the streets, with protesters complaining the measures would have no real effect on them.

"The prime minister hasn’t told us anything," Stav Shafir, one of the protest leaders, said.

Roni Sofer, an aide to Netanyahu, said, "[The PM] understands the severity of the problems and believes there are serious solutions, but actions need to be taken responsibly".

Israel has one of the highest poverty rates and income gaps in the developed world, and prices for homes, food and fuel have risen in recent months.

For middle-class Israelis, the high cost of living makes owning property impractical if not virtually impossible, and causes many working Israelis to live in debt from paycheck to paycheck.

The average Israeli salary is about $2,500 per month while teachers and social workers typically earn less than $2,000 per month.

But the spokesman for the prime minister said the economic situation is good in Israel.

"We have one of the lowest unemployment rate and one of the highest growth rate in organisation for economic co-operation and development," he said.

"As we move to answer the demands of the protesters and we will, we have got to keep a responsible economic policy to make sure the Israeli economy remains strong and continues to grow."
(Al Jazeera and Agencies)

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