Analysis / Winners and Losers

The Law of Early Morning Meetings has worked its magic once again. The decisive meeting between the Histadrut and the treasury began at 11 P.M. on Saturday, and lasted until 4 A.M. the next morning. Only then did our heroes cross the finish line, exactly according to the schedule that Amir Peretz had drawn up in advance.

Once the deal had been struck, Peretz and his entourage rushed off to the Histadrut's Tel Aviv headquarters, to a meeting with union heads, who, as expected, gave their blessing to the agreements. Then Peretz was free to inform every radio station - one after another - how he had defeated Netanyahu, brought the strike to an end and earned important concessions for the workers. "We have won on two clauses (wages and dismissals)," he told the nation's elated radio audiences, "now we have to win on the pension funds issue."

The battle was fought on three fronts:

1. Public sector wages. The treasury's first version was a cabinet decision calling for an 8-percent reduction in public sector wages over two years. In the end, the cut will be just 4 percent. But this is still a major victory for Netanyahu, as, for the first time in the history of the state, the workers' gross salaries will go down, not up. Not a freeze, not devaluation, but a real pay cut - something that even the economic plan of 1985 did not manage to achieve.

All the Histadrut achieved here is that the cut was reduced, and that it will not be implemented through legislation. Yet the Histadrut, employing a generous amount of spin, claims that the workers' net salary will not be affected. By taking into account the tax reform that is planned for July, the Histadrut is able to claim that anyone earning up to NIS 7,000 per month will not be hurt by the pay cut.

2. Dismissals. Benjamin Netanyahu wanted a revolution in work relations in the public sector. He wanted to create a new reality, in which government departments and local authorities could be managed efficiently, just like private companies. If a company needs to fire people, it does so.

He did not get his revolution and that is an achievement for the Histadrut. He did, however, get a change in direction and that is an achievement for him. There was an agreement to freeze new hiring. There was an agreement to allow 700 people to lose their jobs in "efficiency drives."

3. Pension funds. Amir Peretz's coup de grace. Right from the outset, he did not want to maintain control of the old pension funds, which he sees as a time bomb that could blow up any politician's career. These funds financed the Histadrut's political activities for years, a fact that borders on the criminal and will one day be investigated. It started before Peretz was elected Histadrut chairman, but the brush of acquiescence tars anyone who knew about it.

Adding to that the fact that the pension funds have huge deficits, Peretz decided that he does not need them hanging round his neck, especially with the Histadrut itself on the verge of bankruptcy.

All in all, Netanyahu won on points, but not by a knockout. Peretz turned out to be a masterful negotiator, skilled in brinkmanship. He did not pull the plug on the entire country and did not burn any bridges, and common sense to prevail.