Outgoing Finance Minister Benjamin Netanyahu enjoyed a small bit of pleasure on Sunday when he heard that the Tel Aviv markets dropped 5.2 percent and bonds markets fell 1.5 percent on the news of his resignation.
There has never been an Israeli finance minister who enjoyed such confidence from the financial markets - and on Sunday afternoon the markets spoke out loudly and clearly. They would not have given Avraham Shochat or Silvan Shalom the same honor. In fact, in Silvan's case, the markets would have gone up.
Netanyahu is trying to have his cake and eat it too: In one month, he passed his final significant economic reforms, so he can not be accused of abandoning the Israeli economy; but just a moment before the disengagement, he quit the cabinet in an attempt to gain popularity on the right and set himself up as an alternative to Ariel Sharon. And he explains all this with a bunch of strange excuses.
The initial reaction of the markets was negative: Netanyahu succeeded in becoming an unprecedented economic icon on the Israeli scene. No other finance minister has even come close. The social organizations and other cabinet members don't like him - but local and foreign investors believed in him.
The public relations of the Israeli economy took a heavy blow on Sunday. It is possible to recover from it - but it is not to be taken for granted.
Just like the CEO of a company, a finance minister is judged primarily by what he inherits and what he passes on to his successor. In his case, Netanyahu is leaving behind a number of important reforms that need to be implemented, a few professional and staunch officials, and, in particular, an economic strategy that he managed to inscribe in the publics' minds by using his rhetorical skills.
The resignation of the finance minister just before the disengagement may possibly - in theory - spread fear and confusion in the markets and the economy. But when Stanley Fischer is the governor of the Bank of Israel, the safety net of American loan guarantees is spread out under the government bond markets, and Prime Minster Ariel Sharon wants to prove that he is more Bibi than Bibi, then there is no reason to expect a change in economic policy.
Netanyahu and Sharon battled during the last few months over and over again about who deserves the credit for various economic steps, and now Sharon has a golden opportunity - to prove that he is also Bibi. He has appointed a finance minister who will continue the economic policies of the past two years - and support him.
Ehud Olmert, who was appointed acting finance minister on Sunday evening, was Netanyahu's biggest critic in the last year. But don't be surprised that once he makes himself comfortable in the finance minister's office, Olmert will also try to be more Bibi than Bibi, and quickly pass the regulations that are part of the Bachar reforms, as well as the 2006 budget cuts.
In any case, it was very likely that this government would end its term in a few months - with or without Netanyahu's resignation.
The more important question is: Who will be the next prime minister and who will be his finance minister? Netanyahu's dream is that it will be one and the same.
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