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Israeli economist: “Unprecedented consensus” on economic damage to come from new judicial reforms

MK Simcha Rotman, head of the Constitution Committee, leads a committee meeting at the Knesset in Jerusalem, February 20, 2023. (Photo: Yonatan Sindel/Flash90)

During a debate held on Monday by the Knesset Finance Committee, Israeli economist Yossi Shpigel said he was “astounded” that an “unprecedented consensus” of Israeli economists believe the judicial reforms proposed by Prime Minister Benjamin Netanyahu would cause significant damage to the Israeli economy.

These comments come after multiple statements from economists in Israel and the U.S., which argued against the reforms on the basis of predicted economic consequences. In January, hundreds of Israeli economists signed a letter against the proposed reforms. Earlier this month, 56 U.S. economists signed a similar letter.

Shpigel, president of the Israel Economic Association, said the proposed reforms would harm Israel’s credit rating, leading to higher interest payments on Israel’s debt. He further noted that these interest payments would likely cost as much as the current budget for Israel’s welfare ministry.

Increased interest on Israel’s debt, however, was not the only economic consequence of the reforms, according to Shpigel.

He predicted that Israel’s high-tech sector – a central part of Israel’s economy – would also be greatly affected, adding that the proposed reforms could cause the high-tech sector to shrink by 10% and that the losses would amount to half of the Israel's Health Ministry budget.

Despite pressure from protestors, economists and fellow government officials, Netanyahu has continued to move forward with his efforts to pass the proposed reforms, arguing that he is acting on behalf of the Israeli voters.

“The people made their electoral choices and the representatives of the people will exercise their right to vote here in the Knesset. That's called democracy."

The All Israel News Staff is a team of journalists in Israel.

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