Although the Israeli Government tries to hide it, economic impact caused by judicial reform starts to become real. And Moody’s has come to confirm that. This major US credit rating agency downgrades Israel’s outlook positive with stable. “This is not a big drama,” the finance minister replied. Bezalel Smotrich. But this opinion adds to the dozens of inner voices that warn. devastating consequences For the Israeli economy caused by the executive initiative Benjamin Netanyahu. Meanwhile, the public continues to show their opposition on the streets.
“The change of outlook from positive to stable is a corruption As the recent events surrounding the proposal to reform the country’s judicial system have shown, the Israeli Government’s moody’s this is an explanation. “The way the executive tries to implement far-reaching reform without seeking broad consensus It points to a weakening of institutional strength and policy predictability,” he added. These perspectives from the London-based firm new York They’re already starting to show. Recently, Israeli shekel weakened and traded at 3.66 per dollar and 4.04 per euro this Wednesday. For the first time in two years, the euro exceeds four shekels.
“with God’s help”
They still look away from the Israeli government. “Israeli economy stable and solid and with the help of Allah, it will continue to be so.” Netanyahu and Smotrich joint statement. They did not hesitate to point out the well-known US agency’s ignorance of the local context. The concerns expressed by Moody’s are “natural for those unfamiliar with the power of Israeli society,” the statement said. Smotrich went further, saying he “didn’t think so.” Economists are great experts in forensic matters.The controversial far-right minister points out that any damage to the economy will come from “lie campaigns” against the reforms.
But these concerns are not new. Anat guettahead Israel Securities AuthorityHe squeezed the last hours of his duty to express this uneasiness he shared with important economists, especially with him. the central bank And The Ministry of Finance. “Moody’s statement is not just a warning, it’s chance “To recalculate our path and take seriously the concerns of investors that have driven capital market growth over the past decade,” Guetta said. stop the legislation without finding broad consensus.
Millionaires lose
“This, deterioration of the economy Israel said Business Forum Israel, which represents the 40 largest companies in the country. After emphasizing that stopping the plan would calm financial markets and help the economy grow, “Until such an announcement is made, the damage to the public will increase and cause irreversible damage.” Moody’s decision came a month after their initial warning. “If fully implemented, the proposed changes could significantly weaken the power of the judiciary and therefore, be bad for creditThe agency warned in a report on March 7.
Moody’s also warned they could “upgrade”. long-term risks He added, “Israel’s economic prospects, especially for the flow of capital to its important high-tech sector.” While the Israeli government seems to ignore negative views on its actions, experts And local population They are concerned about the uncertain future of the Israeli economy. Smotrich believes judicial reform could be good for the economy. However, the Bank of Israel, which advocates judicial independence, economic growth below 3% in 2023, after an increase of 6.4% last year.
As Finance Ministry officials warned last month, this loss in economic growth could mean: to lose Between 50,000 and 100,000 million shekels, some with annual GDP between $14,000 and $27,000 million. The protests in the squares continue. thousands of people they hold demonstrations every Saturday against reform, which they see as a threat to their democratic system. Netanyahu halts ratification of legislative package post easter He is Jewish, but he is stubborn in continuing his offer. For now, domestic opposition hasn’t deterred him, but we’ll see if the slowdown in capital flows from abroad will convince him.