Senior Israeli Finance Ministry officials warn judicial reforms could seriously damage Israel’s economy
Chief economist argues a downgrade in Israel's democracy and governance indicators will lead to a decrease in GDP
Senior ministry officials briefed Israeli Finance Minister Bezalel Smotrich on Monday, raising the alarm that the government’s controversial judicial reforms could do “very significant harm” to the Israeli economy.
In her released position paper, the Finance Ministry’s chief economist, Shira Greenberg, warned that the government’s judicial overhaul could reduce Israel’s Gross Domestic Product by 270 billion shekels (almost $73 billion USD) over the next five years. In addition, she warned that the state could lose 70 billion shekels ($19 billion USD) in revenues.
“Damage to Israel’s ranking in the democracy and governance indicators is expected to lead to a structural decline in the rate of GDP per capita growth rate of 0.8 percent per year,” warned Greenberg’s position paper.
After the initial losses, Greenberg added that “a decade later, the negative impact on state revenues is estimated at about NIS 385 billion [$105.4 million USD] over the following 5 years.”
In a protest letter to Israeli Prime Minister Benjamin Netanyahu, senior Israeli business leaders and heads of the country's largest banks, warned that the proposed judicial reforms would harm the Israeli economy and turn the country into a dictatorship.
“This move will seriously damage Israel’s economy, and beyond that, it will damage Israeli society as a whole, its resilience, its security and its values,” warned the letter.
On Tuesday, the Institute for National Security Studies (INSS), one of Israel’s leading think tanks, issued an unprecedented warning of the potential consequences should the current judicial reform bills pass.
“The judicial changes in their current form will seriously harm the functioning of the IDF [Israel Defense Forces], will reduce Israel’s ability to deal with its enemies, endanger relations with the USA and sabotage the economy,” the INSS warned.
The All Israel News Staff is a team of journalists in Israel.
