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In November 2001, Histadrut Chairman MK Amir Peretz struck the economy in response to the economic plan produced at the time. During the renegotiations, Peretz demanded that Yuval Rachelevsky, the treasury wages director, promise, "the government will guarantee not to fire a single pubic sector worker" (proving there's nothing new under the sun). Rachelevsky burst out, "What are you talking about? You plan to fire 55 Histadrut workers." Peretz shouted back, "You won't teach me how to run the Histadrut."

And it's true. There's no need to teach Peretz. He knows how to fire on his own. Histadrut workers went to the Labor Court Tuesday to seek an urgent hearing on the fact that Peretz, defender of the workers, is demanding 320 workers, instead of the 200 he had announced, be fired from the Histadrut, and that he is treating the workers "with extreme insincerity and raising insincere demands."

This isn't the first round of firings in the Histadrut. In recent years, it has fired some 3,000 workers and holds the dubious title as the enterprise that has fired more people than any other in the economy. And that doesn't count the tens of thousands of Koor, Solel Boneh, and Sneh workers fired because of colossal mismanagement by Hevrat Ovdim; nor does it include the mismanagement, political cronyism and corruption in the Histadrut pension funds that now suffer enormous actuarial deficits that won't enable pensioners to get their money.

So where does Peretz get the chutzpah to demand the prime minister, forced to deal with budgetary difficulties in an economic crisis, not lower wages and not fire, when he is doing it himself? Is there no limit to hypocrisy?

Opposing him in the limelight of the TV cameras is Finance Minister Benjamin Netanyahu, who says, without blinking, "I call on everyone to enlist for one difficult year so we can all enjoy the fruits of the economic plan." The truth is the plan will not lead us to growth nor shrink unemployment. It is a rescue plan at most, and if it is not implemented, the economy will sink into a profound financial crisis and Netanyahu won't be able to stop the economy, which he said is "three meters from the edge."

But significant growth? No way. For significant growth, there would need to be completely different conditions that Netanyahu and Sharon are not ready to give to the people of Israel. To get the economy out of the deep hole into which it has sunk, the atmosphere needs to be completely changed and uncertainty has to be reduced, and then the investments will return, private consumption will increase, and tourism will rebound - and all that cannot happen without an end to the terror in the cities and without an end to the war of occupation in the territories.

On that issue, Sharon and Netanyahu see eye-to-eye. Neither wants to see any serious negotiations with the other side. They pile on endless objections to the road map, and they will torpedo it the way they torpedoed all previous efforts to reengage in negotiations - from the Saudi Arabian initiative and on. They don't want to give up a single settlement, not even an illegal one like Mevo Dotan B, where six soldiers are protecting a settler named Yossi who insists that's where he wants to live.

The immediate economic result from the policies of Sharon and Netanyahu was an increase in the IDF's budget, which is why wages, allotments and civilian expenditure must now be decreased. But the indirect ramifications are much worse. German Foreign Minister Joschka Fischer said Tuesday in Jerusalem that he is worried how Israel's standing in Europe is slipping. Exporters say they are getting cold shoulders from European business people who are not interested in conducting business with Israel because of the occupation regime and the assassination policies that harm civilians and children. The European Union protested this week against the plan to include Ariel and Immanuel on the Israeli side of the separation fence, and thus create a fact the other side cannot accept. Thus, the conflict is intensifying, and the political and economic horizon will continue to fade.