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Netanyahu says fears of economic damage from judicial reforms unfounded

The reforms “will restore Israel to the legal situation of most of the leading democracies in the world, where it had been for 50 years,” says the Israeli premier.

Israeli Prime Minister Benjamin Netanyahu at a press conference to discuss the economy and judicial reform, Jerusalem, Jan. 25, 2023. Photo by Kobi Gideon/GPO.
Israeli Prime Minister Benjamin Netanyahu at a press conference to discuss the economy and judicial reform, Jerusalem, Jan. 25, 2023. Photo by Kobi Gideon/GPO.

Israeli Prime Minister Benjamin Netanyahu on Wednesday dismissed claims that his government’s planned judicial reforms would negatively impact the country’s economy, stating that to the contrary, they would strengthen it.

“In recent days, I have heard concern about the effect of the judicial reform on our economic resilience,” said Netanyahu at a press conference in Jerusalem. “The truth is the exact opposite. Not only will our moves to strengthen democracy in Israel not hurt the economy, they will strengthen it. They will restore Israel to the legal situation of most of the leading democracies in the world, where it had been for 50 years,” he continued.

The real problem Israel’s economy faces, he said, is an overbearing legal system.

“If there is one major growth engine in Israel, it is the removal of overregulation and superfluous legal processes,” he said, citing as an example the gas pipeline deal, which has brought Israel “billions of shekels per annum” but was “delayed for years due to superfluous legal processes.”

Netanyahu described the “hue and cry” against the reforms as a “movie” he’s already seen, noting the storms that took place over policies he had implemented in the past. The dire predictions of the naysayers then never came to fruition, either, he said.

Over 270 senior economists from Israeli academia and the commercial sector, as well as former heads of the National Economic Council (a body that coordinates economic policy for the Prime Minister’s Office) and senior Bank of Israel officials who had worked for Netanyahu in the past, have signed a letter warning against legal reform, saying it could do “unprecedented damage to Israel’s economy.”

The letter followed a meeting on Tuesday between Bank of Israel Governor Amir Yaron and Netanyahu, in which Yaron expressed concern that the reforms could hurt Israel’s credit rating.

Yaron, who had just returned from the World Economic Forum in Davos, asked to meet with Netanyahu urgently to tell him that the issue is being followed closely and with great concern in the economic world.

Joining Netanyahu at the press conference were Finance Minister Bezalel Smotrich, Economy Minister Nir Barkat and Foreign Minister Eli Cohen.

Cohen, who also attended Davos, disagreed with Yaron’s presentation of the situation, saying at Wednesday’s press conference that the proposed reforms were brought up “at none of my meetings” and that no one had so much as hinted that they had concerns with regard to it.

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