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Jerusalem, 25 Jan. Israeli Prime Minister Benjamin Netanyahu met last night with the Governor of the Central Bank of Israel, Amir Yaron, who warned him about the risks posed to the economy by the judicial reform plan, which could scare away investors and hurt the rating country credit.
Yaron conveyed to Netanyahu the concerns and warnings made by important figures in the political and economic spheres during the meetings that the BCI governor held at the Davos Forum, which he attended as Israel’s main representative, Hebrew media reported today, citing official sources.
According to these reports, Yaron explicitly told Netanyahu that judicial reform will harm the economy while the prime minister expressed no intention of softening its content in what they called an “emergency meeting.”
The BCI has sent to the Finance Ministry, led by religious ultranationalist Bezalel Smotrich, a report listing concerns expressed by international rating agencies.
A BCI statement confirmed the meeting between Netanyahu and Yaron to convey to him “issues that arose in deliberations held in recent weeks with senior international economic officials and senior officials of rating companies,” without mentioning judicial reform.
This is the first face-to-face meeting between the two since Netanyahu took over as prime minister, who chose Yaron as BCI governor in his previous term.
The meeting, which the Prime Minister’s office has not reported, took place on the same day that hundreds of workers in the booming high-tech sector called an unprecedented strike for a few hours and took to the streets of Tel Aviv to protest against The economic impact of judicial reform.
Around 10% of Israeli workers work in the high-tech sector, which represents about 15% of GDP, 25% of the total income tax paid in the country and more than 40% of the exports.
That strike, which was joined by workers from up to 500 private sector companies – more than 150 high-tech ones – came three days after a massive protest on Saturday in which more than 130,000 Israelis took to the streets in various parts of the country to express their rejection of judicial reform, which undermines the independence of the judiciary.
CONTROVERSIAL JUDICIAL REFORM
The judicial reform plans, announced by the new Government, include the controversial “annulment clause”, which allows a simple parliamentary majority to annul a Supreme Court decision that implies repealing a law or government decision; in addition to eliminating the assumption of “reasonableness” so that this court can prevent appointments to high positions if it violates the law.
It also implies a politicization of justice, by allowing political officials to replace lawyers on the Judicial Appointments committee; and as legal advisors to the ministries.
Two former BCI governors, Karnit Flug and Jacob Frenkel, published a joint editorial on Monday in Yedioth Aharonoth, the country’s newspaper with the largest circulation, in which they also warned of the damage that the judicial reform as it is proposed can inflict on the Israeli economy. and on your credit rating.
On the same day, a senior BCI official, Moshe Hazan, resigned as one of the six members of the BCI’s monetary committee, to “get involved in the socio-political sphere” and stated that it is difficult to remain in that position “while Israeli democracy is in danger,” he said in his resignation letter.
Amidst the uproar over the economic impact of the judicial reform, Netanyahu and Smotrich also met yesterday to establish the new government’s fiduciary measures and coordinate them with the BCI’s monetary policy and announced that the annual budget will be presented soon.
“In the face of the opposition’s alarmism and irresponsible actions that seek to damage the economic strength of the State of Israel, the coalition is united and responsible and will work together for Israeli citizens,” said Smotrich, one of the leading advocates of judicial reform. since the election campaign.
Driven by high technology, innovation, the military industry and construction, the Israeli economy has had sustained growth in the last two decades, reaching 8.1% in 2021 -the largest increase since 2000-, although forecasts by 2022 they have moderated to an increase of 3% due to the global situation. EFE
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