Hundreds of senior economists this morning published an opinion and warned against the legal revolution being promoted by the new government: "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."
This is the first initiative bringing together senior figures in economics and business administration and reflects a consensus that outlines clear ideological and economic lines. Among the signatories: 10 economics professors, former governors of the Bank of Israel, past and present presidents of the National Economic Council and many others.
The economists explain, "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."
The economists cite the example of how S&P downgraded Poland's credit rating in 2016 on the grounds of harming the independence of the Constitutional Court and constitutional matters.
Among the signatories was Nobel Prize Economics laureate Prof. Daniel Kahneman, former National economic Council heads Prof. Eugene Kandel and Prof. Manuel Trachtenberg, both advisors to Prime Minister Benjamin Netanyahu, former Bank of Israel Deputy Governors Avia Spivak and Zvi Eckstein, former economic advisor to the Minister of Finance Prof. Omer Moav former Ministry of Finance director general Avi Ben-Bassat and many more.
Brain drain
The economists warn against "damaging the ability of the government and companies in the business sector to raise sources of financing and a decrease in investment," which, "will primarily harm the Israeli high-tech industry, the growth engine of the economy. This damage is expected to intensify in view of the emerging crisis in the industry and the possibility that high-tech companies will move their centers outside the country's borders."
In addition, the economists warn of a "brain drain" - immigration that has consequences for the economic resilience of the State of Israel, due to the combination of the damage to the high-tech industry and the damage to individual rights due to the weakening of the justice system.
"Beyond the immediate effects of the government's moves, there is a serious concern that the weakening of the justice system will lead to long-term damage to the growth trajectory of the economy and the quality of life of the residents of Israel," the economists add.
Published by Globes, Israel business news - en.globes.co.il - on January 25, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.