The Bottom Line / Why the Sudden Change of Heart?

After the agreement between the treasury and the Histadrut, the bottom line is that the fat man will be fatter and the thin man will be thinner.

After the agreement between the treasury and the Histadrut, the bottom line is that the fat man will be fatter and the thin man will be thinner.

The deal is that the wages in the public sector - the fat man - will rise next year by 7 percent, of which 3 percent is reinstating cutbacks from a year and a half ago, while the other 4 percent is upgrades for seniority and promotion.

On the other side of the coin, the private sector - the thin man - gets no similar break. He's been cruelly cut back in the past two to three years, with factories and employers cutting back, closing plants and firing workers. They don't plan on being good like the new Netanyahu.

The thin man's condition will worsen next year in comparison to the fat man. His pulling power will diminish, in direct contrast to Netanyahu's declaration on taking office. It contradicts the aspirations of fast growth and reducing unemployment, because such growth comes when the private sector is encouraged and not from extra handouts to local government.

Why did Netanyahu give in, and so quickly, to Histadrut chief Amir Peretz?

Netanyahu changed after his failed putsch in the Knesset and after his brethren in arms, the Shinui ministers, were fired. Until now, those five Shinui ministers had been his most stalwart supporters in cabinet. They backed him on reforms and cutbacks. Soon Labor ministers will be taking their place and that automatic support will become automatic opposition.

Netanyahu read the new map and understood that he could not go out to battle.

Furthermore, Netanyahu lost his fighting spirit last April. He no longer roams the treasury corridors with a knife between his teeth, waiting for more reforms and cuts. He is more fearful of his position in the public eye as a "prime ministerial candidate" and he fears Peretz's blackening of his image. So he was ready to give up on a lot more of what the economy needs now.

And let's not forget that when you continually declare that the economy is out of the woods, the crisis is behind us and we're on the path to growth, then it's very hard to insist on cutbacks. Once the words are out, you become a slave to your words.

And why is Peretz ready to give in without a strike to prove that he achieved the best that he could?

Because once he joins Labor and is in government, it's another story completely. He can no longer declare a strike every second Thursday, he'll have to concentrate on Labor's agenda: disengagement.

In addition, Labor voters, the bourgeoisie, are no great fans of public sector strikes that cause tremendous suffering and Peretz will be joining the fray for Labor primaries, because he wants to be party leader. So he's happy to close the deal without a strike.