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Netanyahu is out as new Israeli government survives confidence vote

Israel has a new prime minister for the first time since 2009 after a power-sharing government led by Naftali Bennett survived a confidence vote on Sunday.

Why it matters: Benjamin Netanyahu, Israel's longest-serving prime minister and the man around whom Israeli politics have revolved for a decade, will now become opposition leader. Bennett, a right-wing former Netanyahu protege, will lead the most ideologically diverse government in Israeli history.


Driving the news: Netanyahu fought desperately to avert this outcome, vehemently denouncing Bennett and pressuring fellow conservatives to abandon him ahead of the vote. Tensions were so high that the head of the Shin Bet domestic security agency warned of potential political violence.

  • Netanyahu used his last speech as prime minister to denounce President Biden's Iran policies and claim that Bennett would be too weak to stand up to Washington. As Bennett spoke, Netanyahu allies repeatedly interrupted him.
  • Shortly before the vote, Netanyahu was asked by reporters if he was committed to an orderly transfer of power and answered sarcastically: "No, there will be a revolution. What an idiotic question."

What's next: The formal ceremony to mark Bennett's entry into the prime minister's office will take place on Monday morning. The outgoing prime minister would traditionally attend, but Netanyahu has not said whether he'll do so.

  • Netanyahu has also promised to quickly bring down the government, which could be quite fragile given its narrow majority and deep ideological divisions.
  • Netanyahu, meanwhile, will be leading the opposition while facing a corruption trial.

The big picture: Bennett became prime minister despite winning just 7 of the 120 seats in the Israeli parliament, the Knesset, in the March elections.

  • In the post-election chaos, he played the kingmaker role because neither Netanyahu nor Yair Lapid, the centrist opposition leader, could form a government without him.
  • Bennett ultimately elected to join with Lapid and an eclectic coalition of other parties — including the Islamist United Arab List, or Ra'am, the first Arab party to join an Israeli government in five decades.
  • Netanyahu has called Bennett's move the "fraud of the century" because Bennett had promised before the election not to partner with Lapid.
  • Under their coalition deal, Lapid and Bennett will both hold vetos on the government's policies, and Lapid will rotate in as prime minister after two years.

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Why it matters: What goes up must generally come down, and there are strong indications — like data last week from prominent used car marketplace Manheim — that the unprecedented rise in auto prices is peaking. In the second half of this year, cars might well be a force making inflation numbers look artificially low.

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