Something sad happened to three leaders of very important countries in Western Europe - Gerhard Schroeder, Jacques Chirac and Silvio Berlusconi: their parties (or the party blocs under their leadership) suffered upsets in the recently held elections for the European Parliament. The weakening of these parties, which was also expressed in the strengthening of the parties that are less enthusiastic about the tightening of the European Union, affects not only the standing of the parties in the European Parliament but also their position in their own countries; and as a result, also their chances of promoting the social-economic reforms that they have announced.
In those three countries - Germany, France and Italy - the reforms seemed to be in full swing. Their governments had committed to loosening the labor markets, whose inflexibility was blamed by many analysts for the most of the delay in economic recovery and growth; to altering the national health pension laws, and to lowering taxes. Something has already been done: Germany has reduced its excessive unemployment benefits and instituted a fee for doctors' visits (revolutionary for the German citizen); France has made certain amendments to the pension laws, and the two countries have lowered taxes. Italy has made declarations, but has so far done almost nothing.
The three countries have thick reform plans for various spheres, particularly, but not limited to, pensions. Germany's Agenda 2010 plan is spread out, as its name suggests, until the end of the decade. After the recent elections, however, the chances of implementing these programs are very slim.
Schroeder is facing a few elections in the coming year, and there is reason to be concerned that the opposition will gain a two-thirds majority in the upper house, which will be able to veto any legislation. Schroeder's very job is in doubt.
In France, the strengthening of the center-left has breathed new vigor into the trade unions, which are threatening to thwart the reforms in the health laws and the privatization of public companies. The government heads have already felt the heavy hand of the electricity workers on the switches, two weeks ago on the main boulevards and in official residences.
In Italy, the ability of the trade unions and the masses in the streets to deter the government from instituting any real reforms has increased since the victory of the center-left in the elections for the European Parliament.
It therefore appears that the reforms chapter in the three sick economies of Western Europe is over for now.
And here? The loss of the government's majority in the Knesset, and the possibility - although distant at present - that Labor will join the government, makes the implementation of most of the planned reforms that were, and still are, controversial almost impossible. There is a reasonable chance that minor reforms will be instituted in the bank charges, against which there is almost always a wall-to-wall coalition. Even the big reforms for the capital market, planned by Finance Minister Benjamin Netanyahu, with the separation of the ownership, or at least the management, of the provident funds from the banks, has broad support in principle.
The recommendations of the Bachar Commission, appointed to examine the issue, however, have been neither formulated nor submitted, and even when they are submitted and if they are approved by the government, the banks have the ability to recruit objectors in the Knesset corridors. The tendency of MKs in the old and expanded opposition to attack the minority government's weak spots only strengthens the banks.
The two other major reforms waiting to be implemented - the ports and the education system - are liable to be shelved (and who even remembers the report by the commission on the incorporation of the hospitals?).
In the absence of an agreement with the workers, even when the government enjoys a solid majority in the Knesset, passing the laws required to implement those reforms is a difficult task. Without such a majority, the chances of those reforms becoming a reality are very slim.
Even the nice proposal approved by the ministerial committee for legislation a few weeks ago - to keep Israel on daylight saving time so that the time here will be the same as in Western Europe - is liable to fade away, due to the need not to annoy the ultra-Orthodox factions.
And we haven't even mentioned the 2005 budget, which according to its principles is supposed to be a reflection of the reforms implemented in the past two years and which many would like to unravel. Thus, for example, the reform in the child allowances is a condition - not the only one - for United Torah Judaism's joining the coalition.
Netanyahu declared in an interview in the United States last week that Israel is currently the country implementing reforms the fastest. A survey of the political arena, however, points to the conclusion that the era of reforms has ended here too. For the time being.
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