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One could feel for the prime minister yesterday when he called out to "my friend" Ben-Eliezer - "for this you're breaking up the government?" Up to the last moment Sharon believed his loyal ally would bark a bit, but ultimately return to his kennel (the positions and ministries) with his tail between his legs. This is how things have been for a year and seven months. So what changed?

Sharon was really in mourning for himself yesterday. He realizes that now, without the legitimacy provided by the Labor Party to all his extreme actions in the territories, without the diplomatic umbrella provided by Shimon Peres in the capitals of the world, his position on the seat of power is shaky. From now on he runs a right wing government, with settlers and ultra-orthodox, and the world will see him in a completely different light.

His colleagues in Labor will not hesitate to attack him from today, from every side, at every opportunity, on economic and social matters, on security and terrorist affairs. His hollow promise to bring us "peace and security" will now be wielded as a two-edged sword, because everyone knows he brought neither peace (okay, that was Sharon's little joke) or security.

On the new map drawn up yesterday there is no place for big fears, because the new political situation is actually more normal. From now, there is a clear rule of right wing and ultra orthodox parties, against a left wing opposition - and a fighting opposition is the life breath of a democracy.

Now the right can no longer claim someone else is responsible for the situation. Even Public Security Minister Uzi Landau will no longer be able to dump his failures on the defense minister or on Shimon Peres. Now everything will be clearer and more lucid.

Sharon yesterday called the argument between himself and Labor "nonsense." If so, why did he so obstinately refuse the first compromise version calling for "equal distribution of resources between the development townships and the settlements?"

Because, although Sharon speaks haughtily about the importance of the unity government, the settlements are his baby. For them he is willing to give anything, with no budget limitations, something he would not give any development township. And how can one presume to compare his darling pioneers (of the settlements) and mere Ofakim and Yeroham?

There is also no need to worry about Silvan Shalom's statement predicting a difficult economic year because of Labor's withdrawal. First, the economic situation is already bad and the expectations for 2003 were pretty grim, even before Labor's withdrawal.

Besides, Shalom managed to pass the budget at first reading yesterday and there is no reason why he will not succeed in the second and third reading with the same allies. Therefore the credit rating agencies have no immediate cause to cut Israel's credit rating unless the economic situation gets worse.

However, Labor's withdrawal from the government will indeed damage the economy in other ways. Political instability does not work in favor of any economy, especially since the right wing and ultra orthodox parties will incessantly try to squeeze the coffers dry, endangering the planned deficit.

Also, Labor's withdrawal will greatly weaken Israel's standing in the world. When world leaders discover the meaning of a narrow right-wing government, it will be difficult, even for a sympathetic American administration, to give that government any guarantees. Therefore it will be more difficult for Israel to raise capital in world markets.

As a result, interest rates will rise, investments will go down, and these will have a negative impact on the recession and the unemployment.