Analysis / Waiting for Act II
This is a Greek tragedy with two protagonists. Both entered the first act a month ago, and since then each has been performing his individual role to perfection. One is "protecting society and democratic values." The other is an admiral "trying to fix the hole in the bottom of the ship."
This is a Greek tragedy with two protagonists. Both entered the first act a month ago, and since then each has been performing his individual role to perfection. One is "protecting society and democratic values." The other is an admiral "trying to fix the hole in the bottom of the ship." They conducted a stubborn negotiation during the first month, constantly glancing toward the audience - the media, and through it, the public - in the hope of winning the audience's sympathy. And all the while they were backed up by a Greek chorus, the large unions.
Both knew from the first lines of the play that the general strike would arrive in the second act. Nothing could stop it. It is part of the tragedy. It must show up, and cause damage to exports, production, and services to the citizenry. Without it, the tragedy doesn't have an end.
So, anyone waiting for a magician, perhaps in the form of the prime minister, to show up at the last minute and make Amir Peretz and Benjamin Netanyahu sign an agreement, is waiting in vain.
Peretz cannot sign an agreement with Netanyahu before the strike. He would be regarded as a traitor who caved into Netanyahu. He also can't do it to the large unions, which are afraid of losing their power. Today, the large unions, representing the great monopolies in the economy - the Israel Electric Corp., Mekorot, Bezeq, the Airports Authority, Israel Railroad, the banks and state workers - control their workplaces. It was IEC union chief Yoram Oberkovich, not the company's CEO, who signed a wage increase deal with the treasury's wages director Yuval Rachelevsky.
Without the approval of the works committees, a worker does not move from one chair to another, there are no promotions and no wage scales. Netanyahu's plan is to reduce that absolute power, and enable managers to manage. That's what the large unions are fighting.
Peretz has to give them his absolute support because the Histadrut is mostly financed by the workers with collective wage agreements at the monopolies, and the Histadrut is nearly bankrupt.
As far as Peretz was concerned, the negotiations could have gone on forever, but Netanyahu understood he must cut it short right now, because otherwise he won't have time to implement the cuts needed to squash the deficit. He's already two months behind the original schedule and is afraid of the financial markets. So far they have given him enormous credit: since taking up the Finance Ministry, the stock market has risen by some 30 percent, the dollar has dropped against the shekel and interest rates have also dipped. But he knows the markets are fickle and can change overnight. And then, when the dollar is approaching the 5-shekel mark, we'll be in a financial crisis and it will all be blamed on him.
There is a genuine ideological dispute between the two. Netanyahu believes in the free market, and a lean and efficient government sector. Peretz, on the other hand, believes in large government, with central economic management, taking from the rich to give to the poor. That's why Peretz believes it is better to increase the tax burden now and use that to close the budget hole. Netanyahu knows that more taxes will only deepen the recession and increase unemployment - and then all the unions and social organizations will start shouting. They have the right to shout. He has the burden of responsibility.
When a general strike breaks out, the workers are more powerful. They cause the damage to the economy and society, but the public blames the government. The striking workers believe they will win, so they are in no hurry to compromise. They believe the government will cave in and give up and won't dare deduct the strike days from their wages. That's why the finance minister, if he wants to shorten the strike, should announce already now that strike days will be cut from wages. That would create an "automatic stabilizer" to make the second act of the tragedy, the strike, as short and painless as possible.
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