Taking Stock / Little Holes

And here is the news from Jerusalem: Political analysts believe Prime Minister Ariel Sharon means to poke little holes in the treasury's economic program.

Why? Isn't the economic program a good one? No, the issue isn't the substance of the economic program. Sharon, explain the pundits, can't let Benjamin Netanyahu snatch a victory so fat and so fast, such as pushing through the economic plan mere weeks after taking over as finance minister.

If the plan were to be approved quickly, as is, without histrionics and much ado, Sharon would have a real problem. Israel's economic deterioration might be checked, interest rates would start to fall, the tidal wave of layoffs might ebb, fears of financial crisis would wane - and Netanyahu would be crowned the redeemer of Israel's economy. And that is a nightmare scenario that Sharon & Sons cannot afford.

So, their plan, explain the political experts, is to poke little holes in the plan, to whip up fusses and crises, to hold marathon discussions into the night at the Prime Minister's Office, to drag their feet on getting the plan approved.

And finally, after a dramatic night-long meeting, once all the consultants have had their say and left, and the TV cameras have done their bit, the prime minister will declare the compromise he has achieved, to make it crystal clear once and for all: The economic program is his baby, not the finance minister's.

And Netanyahu? He wasn't born yesterday. What he does mean is to ensure that any failure in pushing the economic program through will be accredited to the prime minister. Instead of focusing on the endless irksome details of the treasury's economic program, he'll be busy focusing on the style, on appearances, on possible scenarios if the program bogs down in parliament, and how the blame can be rolled onto Sharon for failing to provide support.

Really, doesn't that all sound like political analysts who rub shoulders with the prime minister's and finance minister's consultants too much, indulging in their usual cynicism? Surely it couldn't be that the prime minister and finance minister would exploit the economic program as a political tool. It is inconceivable that either would take the risk of delaying or castrating it just to promote their images.

One would have to be hopelessly cynical, downright depraved even, to consider that the two are continuing to joust while the economy declines to the brink of financial crisis, triggering mass layoffs, acute devaluation and a dramatic drop in the standard of living.

Meanwhile, the financial statements flooding in from Israel's publicly traded companies, presenting heavy losses for 2002, arouse some doubt about the profits they presented in previous years, and the credibility of "achievements" boasted by the managements.

Some of these managers were pampered over the years with fat salaries in the millions, plus pension and compensation payments costing millions more when they departed their companies for greener pastures.

Will any of them return the money? No. Managerial remuneration for any calendar year is based on that year's gains. When a company makes money, its manager is rewarded. And when it loses money, sometimes wiping out years of gains in one fell swoop, it isn't him who pays.

This week, Bank Hapoalim will be publishing its financial statement. The bank, Israel's biggest, will be reporting heavy provision for doubtful debt. Its chairman, Shlomo Nehama, will be present at its press conference, as will CEO Eli Yones and maybe Deputy Chairman Danny Dankner.

But the real star of Hapoalim's 2002 report won't make an appearance. Amiram Sivan, its legendary chairman over 15 years, the man who led Hapoalim to tremendous success during the 1990s, and the man who is responsible for most of the bad credit it extended over the last five years - he won't be there.

Which is a pity. It would have been interesting to hear his version of Bank Hapoalim's enormous provisions for doubtful debt. It would have been interesting to hear him describe the development of events in which Hapoalim subsidiary Continental Bank, which he also chaired, lent almost a quarter-billion shekels to the Peled-Givony group after Hapoalim had turned them down. It would have been interesting to learn what Sivan thinks would be the appropriate treatment for a person whose poor decisions cost his bank a quarter-billion shekels worth of damage.

The probability that Channel 10 can be sustained as a commercial TV channel looks remote. Its key shareholder, Yossi Maiman, claims that regulatory amendments could save it. That is unlikely.

Does that mean competition cannot be introduced into Israel's commercial TV sector in the foreseeable future? Not necessarily. There is one way to create two or three strong players overnight.

And the solution has nothing to do with Channel 10, at least not as it exists today.

The answer is, if the government doesn't want to restore the misery of a monopoly over commercial television, it must change Channel Two's model. Three companies, which have equally divided the week between them, today control the channel. Instead, the three - Keshet, Reshet and Telad - should each get a channel that they broadcast all week.

That would create three powerful, experienced players in the commercial TV arena, with competing know-how, stars and programs. The only rotation between the trio would be that each four months, one would receive the magical number 22 on the remote control, in view of the audience's reluctance to press any other numbers.

The idea might be daring, some would say extreme. But it's the kind of case in which the regulators should come to their senses and engineer structural change that would prevent a key sector from reverting to its old monopolistic structure.