The Winner

Netanyahu did not give in to the demands of the employers and the Histadrut in a manner that endangered his rule.

Prime Minister Benjamin Netanyahu ought to be pleased. Though the media outlets are trying to tear him to pieces, he is well aware, and rightly so, that his most recent move - passing the budget - was a victory for him and his worldview.

His personal victory is transparent: In a calculated move - not, as has often been claimed, a hysterical or confused one - Netanyahu realized the dream of all previous prime ministers (see Yitzhak Rabin and former treasury director general Aharon Fogel) and crushed the Finance Ministry's bastion of power. Budget director Ram Belinkov did not resign; he was pushed out after erupting in anger when his authority was bypassed. Nor was Finance Minister Yuval Steinitz humiliated: He should have known the senior position is his in name only, and that the real power is in the hands of "Mr. Economy." Now he is not the only one who understands. Everyone understands.

But this victory, whose significance for the government's power structure should not be belittled, is nothing compared to the victory of Netanyahu's worldview. Even before his 100 days of grace (which he did not receive in any case) are over, he has succeeded in taking another step toward changing the face of Israel's economy, via what could be described as a "velvet revolution" - without strikes, without fuss, without demonstrations by single mothers.

Granted, the fruit and vegetable sellers are angry. But they will get over it, and the poor and the middle class will buy less. Owners of SUVs will buy hybrid cars or switch to leasing, and unions will compensate the workers for the loss of vacation days with gifts.

The principles of the revolution were spelled out clearly yesterday by the man who produced what is mistakenly dubbed "the package deal" - Uri Yogev, Netanyahu's top economic adviser. In an interview with Meirav Arlosoroff (TheMarker, May 14), he said, "we gave the Histadrut various agreements on labor relations, but these are not in ideological contradiction to our views or the management of the economy."

Moreover, he stressed, "in exchange, the country received the agreement of the Histadrut and the employers to reforms in electricity, the ports and the Israel Lands Administration, which is far more important than the question of whether the package deal brought in NIS 2.5 billion or NIS 5 billion."

How is it possible that the leading commentators did not understand Yogev's excellent explanations before he uttered them? Perhaps because Netanyahu, not for the first time, understood that the situation has changed, and therefore the means had to change, whereas the commentators are finding it difficult to read the new map.

The present crisis is not like that of 2003 for various reasons, but largely because the drastic means that Netanyahu adopted as finance minister shattered Israel's old economic principles and created a new economic situation - and, more importantly, a new economic consciousness. Anyone who expected to get the Netanyahu who hands down edicts was thinking in yesterday's terms.

What did Netanyahu do now? He gave Histadrut labor federation chairman Ofer Eini "freedom to unionize" and received total freedom to privatize the three giants of the economy: the Israel Electric Corporation, the ports and the Israel Lands Administration. Can anyone imagine former Histadrut chairman Amir Peretz agreeing to such a step?

Less than five years after Netanyahu spelled out his revolutionary ideas on the privatization of energy, transportation and lands, and less than three years after, as finance minister, he encountered strong opposition from the Histadrut, the Labor Party and employers, he has succeeded in reaching an agreement that is liable to change the economy and the job market beyond recognition.

The public sector has admittedly not been hurt. But ever since Netanyahu coined the slogan "the fat man and the thin man," referring respectively to the government and the private sector, it has been doomed in any case. This time, it got a break of sorts: According to the agreement, the workers will be able to unionize. But where? Working for the Ofer Brothers, who will hire Indians and Filipinos in their place?

It is hard to overstate the magnitude of his success, especially in light of the hysteria over what has been described as "Netanyahu's malleability and susceptibility to pressure." What malleability? After all, the result was known in advance. First, the treasury scattered threats about cutbacks, though it was clear that not a hair would be removed from the defense budget. Then, the chief of staff got angry and apologized profusely. And Eini, the "strong man," who chalked up glorious achievements, did not utter a peep at the increase in value-added tax and the continued reduction of direct taxes, which Yogev justifiably described as another achievement.

Thus Netanyahu did not give in to the demands of the employers and the Histadrut in a manner that endangered his rule. On the contrary: In full cooperation with Eini and Manufacturers Association President Shraga Brosh, he cooked up agreements that will complete the revolution he promised in the economy and the job market. One can be ideologically opposed to this, but one cannot deny his success.