Ex-TV anchor Yair Lapid named Israeli finance minister

Fri Mar 15, 2013 11:35am EDT
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By Tova Cohen and Steven Scheer

TEL AVIV (Reuters) - A former TV anchor whose upstart political party was the biggest surprise in Israel's January election was named finance minister on Friday as a coalition deal was signed, his spokesman said.

Yair Lapid's centrist Yesh Atid party, which champions bread-and-butter issues of the Israeli middle-class, won 19 of parliament's 120 seats, second after Prime Minister Benjamin Netanyahu's right-wing Likud-Beiteinu alliance's 31 seats.

After nearly six weeks of negotiations, Yesh Atid agreed on Thursday to join a Netanyahu-led government. The deal, and a separate coalition pact with the far-right Bayit Yehudi (Jewish Home) party, were signed on Friday.

Lapid, who will replace Yuval Steinitz once a new government is sworn in, ran largely on a platform of easing financial pressures on the middle class through the need to share the burden - a rejection of privileges for ultra-Orthodox Jews.

The new minister faces a major fiscal challenge in trying to reduce a budget deficit that reached 4.2 percent of gross domestic product in 2012, double an initial target of 2 percent.

To meet a deficit target of 3 percent of GDP in 2013, the government will need to cut 14 billion shekels ($3.8 billion) in state spending and raise taxes by about 6 billion shekels, the central bank has said.

Zach Herzog, head of international sales at brokerage Psagot Securities, said Lapid will have to prove to markets that he can manage fiscal policy.

"From what little can be gleaned about his economic views he will be fairly in line with centrist-right economic policy," Herzog said. "He will make cuts in social services, child benefits. That's part of the platform he ran on."   Continued...

Yair Lapid (C), speaks during a Yesh Atid party meeting, at the Knesset, the Israeli parliament, in Jerusalem March 4, 2013. REUTERS/Ronen Zvulun