Knesset Committee Recommends Not to Activate Article 52

With seven supporting votes and six opposing votes, the Knesset's Economic Affairs Committee recommended to the Israeli Economy Minister caretaker, Prime Minister Benjamin Netanyahu, not to activate article 52 of the Antitrust Law and to avoid sidestepping the Antitrust authority in his efforts to approve the natural gas regulatory framework.

The opposition enjoys the majority in this particular parliamentary committee. Its decision was widely expected, as it is expected that the Prime Minister will not heed its advice and will sign the controversial article within the next few days.

The Committee's Chairman, Member of Knesset (MK) Eitan Cabel, said that it is easy in Israel to turn every issue into a security matter. However, he was not convinced that there is a security circumstance in this case--rather the opposite.

"The issues are in regard to the Egyptian case and then they [the government representatives] said that if there is a problem in Egypt, they will turn to Turkey where all is inclusive," said Mr. Cabel. "We found ourselves in an embarrassing situation because dealing with security issues became an obstacle." Mr. Cabel was critical of the PM's handling of the framework and pointed out that the PM said activating Article 52 became necessary in order to sidestep the antitrust commissioner and not on the ground of real pressing issues of security and foreign policy.

Mr. Netanyahu met on Monday with his Knesset faction and told its members that "the framework is the only way to enable the gas fields development for economic purposes. We are interested in a few gas fields in order that government revenues will be much higher, a few hundred billions of Shekels that would go to education, welfare, health, and other national needs. Without the framework, we certainly won't have that."

However, doubts about the development of the gas fields, even if the framework is approved, are strengthening. In the first two days of the trading week in the Tel Aviv Stock Exchange (TASE), shares of Delek Group, the main Israeli group in the natural gas monopoly, fell 10.7%. During last month, the group also lost a quarter of its value.

The index of energy stocks in the TASE fell yesterday by 4.3%. Analysts in Tel Aviv, most of them who were quite bullish on the gas field development in the last few years, became more bearish yesterday mainly because of the continuing worldwide drop in energy prices.

In an energy conference which was held in Tel Aviv yesterday, even government officials, all of them in support of the framework, were puzzled by the prospects of the development of the gas fields.

Supporters of the framework were encouraged on Monday, however, by a declaration from the Turkish president Recep Tayyip Erdogan. In an interview with a Turkish media outlet, he said that normalization of relationship between Turkey and Israel will benefit Israel and the whole region. "The region needs it," said Minister Erdogan.

In response to Erdogan's statement, Yuval Steinitz, Israel Energy Minister, said that "there is no doubt that the source, among other things, of the Turkish President's declaration that he is interested in improving relationship with Israel is the natural gas regulatory framework and the advancement over the last few months in the framework, and from the recognition of the countries in the region that within a few years' time it will be possible to purchase natural gas from developed Israeli reservoirs."

Ya'acov Zalel