The Bottom Line / No reason to party
Ariel Sharon's victory yesterday came on a particularly difficult day that cruelly summarized the past 20 months of the prime minister's rule. It was an unusual day in the number of terror attacks and their nature.
Ariel Sharon's victory yesterday came on a particularly difficult day that cruelly summarized the past 20 months of the prime minister's rule. It was an unusual day in the number of terror attacks and their nature - a missile attack on an Arkia plane taking off from Kenya, a suicide bombing in Kenya's Paradise Hotel in Mombasa that left 3 Israelis and 9 locals dead, and the shooting attack in Beit She'an the took six lives and wounded another 30 people.
On the eve of the 2001 elections, Sharon promised peace and security. He can't be criticized on the "peace" count, as he didn't dream for even an instant of attempting to achieve it. But Sharon owns the failure on the security count. His time will be remembered as the worst terror period Israel has ever known, a period in which personal security deteriorated to an unprecedented low, dragging the economy with it into a crisis the likes of which we have never seen.
The night he was elected, on February 8, 2001, Sharon hastened to declare, "The government I will lead will work for sustainable economic growth, prevent the resurgence of inflation, manage a responsible state budget with no increase in the deficit, and direct resources to investment in infrastructure and education. We will act to reduce the tax burden on our citizens, maintain the principles of a modern, transparent economy and preserve competition and integration into the global economy."
What is left of that list of promises? Growth became shrinkage; inflation reappeared; the budget deficit grew and grew; the tax burden hit a record high; and not only did the economy fail to integrate into the global economy, it regressed.
In other words, he didn't fulfill a single promise - not in the political arena, not on the military front, and not on the economic-social agenda. And nonetheless, he was re-elected yesterday by a huge majority to lead the Likud.
Yesterday was also an appropriate day for his re-election because of the summary of the first nine months of the year in the banking sector's financial reports. It became apparent that the banks' profits have dropped, and that was no surprise. But what is worrisome is the huge provisions for doubtful debt, NIS 59.4 billion - a sum that indicates that the number of bankruptcies in the business sector is much higher than we had estimated.
If we compare Bank Leumi's performance with that of Bank Hapoalim, we learn that while Leumi's staff has decreased in the past five years, Hapoalim has hired more workers. As a result, Hapoalim's management will have no alternative but to ax hundreds of employees in order to improve its future financial results. The bank's former CEO, Amiram Sivan, didn't make the necessary cutbacks, leaving the job to successor Eli Yones.
In order to maintain reasonable capital adequacy, the banks have reduced credit to the business sector, causing a serious credit crunch and the danger of asphyxiation. The business sector, therefore, expects a very dim Festival of Lights this week.