A grass-roots protest movement among middle-class Israelis that began on the internet-inspired by the revolutions in Tunisia and Egypt that made extensive use of social networks-has resulted in the government changing elements of its fiscal policy, with indications of a potentially much more fundamental change in the future. The protests initially focused on the price of petrol, where-in addition to monthly adjustments to reflect global developments-an increase in the excise tax (effective from January 1st) had boosted prices to a record level. However, the clamour soon spread to encompass price rises in bread, milk products and a variety of other basic consumer goods and services, including water and local government property taxes.

This inchoate protest movement was subsequently taken up by an alliance of major economic bodies. Forming a powerful ad hoc coalition under the leadership of the secretary-general of the Histadrut, Mr Eini, they demanded that the government reverse the recent rises in indirect taxes and basic goods. Despite the misgivings of the finance minister, Mr Steinitz, and some of his senior officials, Mr Netanyahu quickly caved in. On February 20th the cabinet approved a series of concessions, including a rolling-back of the excise tax rise, a 10% reduction in some public transport fares requiring an increased government subsidy of between NIS 300m (US$82m) and NIS 400m, a rise of NIS 450 (US$123) in the monthly minimum wage spread over this year and next, and a 20% increase in the household water quota charged at the cheapest rate.