This was a battle of egoism, machisimo, and personal political interests. Benjamin Netanyahu versus Amir Perez.
Netanyahu, who has internalized the American tendency to vote according to economic circumstances, is building a middle class bloc to support him in his bid for the Likud party leadership and for the prime ministership. Perez, is trying to ensure a spot for members One Nation in the Labor Party, and for a personal bid for the Labor Party leadership and for prime minister, using the support of lower population deciles and the civil servants.
The plans of both protagonists have not changed, which is why we have received, and will continue to hear, varied and conflicting lists of achievements. The Histadrut's (General Federation of Labor in Israel) victory list is very different from the Ministry of Finance's.
Netanyahu the Great is emerging from the budget affair a rather small man. He is a talker, not a doer, caves into pressure, and prefers low politics to high budgets. He therefore needs a victory; an arrangement with the Histadrut to end the strike. He needs quiet.
Perez and Netanyahu are gambling on this year, 2004, and deferring the future. Civil servants won't be fired this year, but in 2005. The Public Works Department (PWD) will become a government company, but won't carry out lay-offs during 2004, but the Ministry of Finance and Histadrut were unable to reach an agreement about 2005. It's the same story at Israel Educational Television: it won't be closed in 2004; its budget will be cut; there will be voluntary retirements; and if things don’t work out - we'll talk again in 2005.
In truth, the Histadrut won on its core issue: potential voters for Perez and One Nation. The Histadrut stubbornly fought for the civil servants and the Ministry of Finance retreated from its intentions. There won't be lay-offs, only voluntary retirement; reductions in overtime were cancelled; the rank upgrades before retirement were restored. The Flieman Government Rehabilitation Hospital and Bnai Zion Medical Center in Haifa will not be consolidated; the sale of Wolfson Medical Center in Holon will be frozen for three months; and Educational Television and PWD workers received a year's grace and good voluntary retirement terms.
The Ministry of Finance won on the big issues. Primarily pensions: the method of calculating pensions on the basis of the last three years' salary has finally been abolished; the retirement age was raised; and management fees for pension funds have been increased. The ministry scored another victory: Perez and friends demanded that the government refrain from making structural changes without their prior consent. This condition was dropped.
There was another major victory. The ability of the Histadrut to call a general strike because of the grievances of one or another interest group was restricted. As for the future of the PWD and Educational Television, the parties agreed that if they could not reach an agreement, the Histadrut may call a strike, but only at the PWD or Educational Television. It may not call a general civil service strike.
What about the structural reform, break-up of the monopolies, the Israel Ports Authority, Israel Electric Corporation, Mekorot National Water Company, Israel Airports Authority, and others? While it's true that the government is not dependent on the Histadrut, the details do not appear in the memorandum of understandings. Negotiations will resume next week. The power of a general strike has gone, at least for this year, and now everything depends on the government ministers themselves.
Published by Globes [online] - www.globes.co.il - on January 5, 2004