Netanyahu Rebuffs Claims Judicial Reform Will Harm Economy

By Yisrael Price

Finance Minister Bezalel Smotrich shakes the hand of Prime Minister Binyamin Netanyahu at a news conference, Wednesday. (REUTERS/Ronen Zvulun/Pool)

YERUSHALAYIM – Prime Minister Binyamin Netanyahu and Finance Minister Bezalel Smotrich held a press conference Wednesday evening to try to stem the barrage of warnings from the financial sector that the proposed judicial reforms will hurt the economy.

“In recent days, I have been hearing concerns about the effect of the judicial reform on our economic resilience,” Netanyahu began.

“The truth is exactly the opposite. Our moves to strengthen democracy will not only not harm the economy – they will strengthen it. They will return Israel to the legal status of most democracies, where Israel was fifty years ago.”

Netanyahu argued that, on the contrary, overweening power in the hands of the courts have harmed the economy, citing as examples courts’ holding up the development of Israel’s gas fields, the Tel Aviv metro and the construction of the Route 6 highway.

“Superfluous legal processes are like sand in the wheels of the Israeli economy,” he said, and that ongoing deregulation will make it more efficient.

Smotrich reaffirmed his commitment to “continue the same responsible policy” of his predecessor Avigdor Liberman.

He also promised a “giant bundle of reforms” that will be attached to the state budget to help ease the process of doing business in Israel.

Earlier in the day, hundreds of economists published a letter urging the government to drop its judicial overhaul.

“We strongly warn against the current initiatives of the coalition, which mean a fundamental change of the system of Israel’s regime and is a danger to the future of the Israeli economy,” it read.

“The damage to the independence of the judiciary will greatly increase the likelihood of damage to the credit rating of the Israeli government and the capital raising of Israeli companies.”

Among the signatories were 10 economics professors, two former governors of the Bank of Israel, past and present presidents of the National Economic Council, and Nobel Prize Economics laureate Prof. Daniel Kahneman.

Their message basically reiterated what the incumbent Governor of the Bank of Israel Amir Yaron told Netanyahu in a meeting on Tuesday. Yaron cited statements by the international credit rating agencies and talks that he held with investors at the World Economic Forum in Davos, from which he had just returned, according to Globes.

Despite the clamor against the judicial agenda, it is not clear that these concerns are shared by everyone abroad or even in Israel.

Eyal Ben Simon, CEO of Israel’s largest insurance company told Globes on Wednesday that the international scene as he perceives it is quite different.

Acknowledging that he is one of Israel’s only CEOs who is prepared to go on record about it, he said: “There is high interest from investors in the Israeli economy in general and in the Phoenix and its subsidiaries in particular. Not only have I not seen a decline in interest but even an increase. And I personally am very ‘long’ (opposite of selling short) on the State of Israel. I believe in the Israeli economy, the Israeli public and the capabilities of the State of Israel.”

When asked specifically the repercussions the judicial reform might have on Israel’s debt rating and investment prospects, he answered:

“Nobody is talking to me about the judicial reform and I haven’t heard anybody talking about cutting the rating or harming the position of Israel.”

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