The Bottom Line / Cooking a Bitter Broth

There's no need to envy Finance Minister Silvan Shalom. There he stands, almost alone, in the tough battle to defend the state budget and preserve economic stability.

There's no need to envy Finance Minister Silvan Shalom. There he stands, almost alone, in the tough battle to defend the state budget and preserve economic stability. The moment it appears he is managing to ward off the approaching evil, he suddenly feels a sharp stab in the back - and when he turns around who is standing there, grinning? The prime minister himself.

"With friends like this, who needs enemies?" Shalom may despairingly ask himself.

Shalom's objective is to end this year with a budget deficit of 4 percent of GDP, and to bring this down to 3 percent next year - an essential prerequisite for preventing a financial crisis that will affect more than anyone the weakest among us.

But it seems Shalom is the only one who understands this. The Histadrut labor federation is demanding a cost-of-living increase and ending of various "impositions" in wages - as if this were Switzerland, and not a terror-whipped state. The Labor Party is demanding that the budget cuts in its ministries should be cut - as if there is no recession and no unemployment. The other parties are just waiting in line.

But all these struggles are dwarfed by the broken reed that is supposed to offer support to the finance minister. After all, it is common knowledge that a finance minister without the support of his prime minister is no more than a lame duck.

But Ariel Sharon has an agenda of his own. Every now and then, he speaks magnificently about responsibility, sacrifice and concessions - but in practice, he thinks primarily of himself and his position in the race for the head of the Likud against Benjamin Netanyahu.

Just a short while ago, Sharon closed a deal with a number of local authority leaders for the reinstatement of the benefits to the Negev and Galilee regions - a small matter of NIS 300 million. Just look at Sharon's goodness as opposed to the evil of Shalom - when he first took office, Sharon promised the heads of the local authorities that he would "order" Shalom to transfer NIS 75 million to their coffers. He also promised the teachers he would "instruct" Shalom to give them the "Slavin compromise" [a reference to Shmuel Slavin, a former Finance Ministry director-general who mediated a wage dispute between the teachers and the treasury].

Furthermore, in December 2001, Sharon signed an agreement with the governor of the Bank of Israel, David Klein, to reduce interest rates and preserve a low budget deficit - without involving the finance minister in the talks at all. And Shalom continued to grit his teeth.

But the climax came last Saturday night, when Sharon summoned Histadrut chairman Amir Peretz to his office "in order to resolve the strike problem," as if the country does not have a finance minister at all, as if Shalom and his people are not busy with the matter day after day - and at night too.

Sharon's intervention led to an extension of the strike and more damage, because now it is clear to Peretz that he no longer needs to reach a compromise with the evil treasury officials. Instead he has an open door to the prime minister, who wants to see the piles of garbage disappearing from the cities' streets as quickly as possible and everyone returning to normal work - so as to demonstrate who is in control.

But what's the price? Who will shoulder responsibility for the crisis when the deficit rises, interest rates soar, and the public rejoins the race for dollars?

Instead of calling the late-night meeting, Sharon should have declared his full backing for his finance minister. Then Peretz would have understood that he has no choice but to compromise and back down from his inflated demands.

But now Peretz is riding high, Shalom feels offended, and we will all eat the broth cooked by the prime minister.