Economy Minister Nir Barkat held a meeting on Thursday with 20 business leaders, who raised their concerns over the negative consequences of the government’s plan to radically overhaul the judicial system — changes they said are already being felt in the economy.
Hosted at the home of Fox fashion chain CEO Harel Wizel, the meeting was also attended by Azrieli Group chair Danna Azrieli, real estate executive Liora Ofer, CEO of Phoenix Holdings Eyal Ben Simon and Tnuva chairman Haim Gavrieli, Channel 12 reported.
“There will be a massive withdrawal of capital from the country,” members of the group reportedly warned Barkat, adding that Israel’s credit rating will also be downgraded.
The coalition led by Prime Minister Benjamin Netanyahu has been pushing a dramatic reform package that would increase government control over the judiciary, allowing it to override court decisions with the slimmest majority and give it full power over judicial appointments.
Critics say the overhaul will remove the judiciary’s role as a check on the power of the ruling majority and enable assaults on human rights. They have also warned that the move would deter foreign investment and weaken the economy.
At the meeting with Barkat, who is a member of Netanyahu’s Likud party, one of the attendees claimed that even the talk of judicial reform has been enough to have an impact on the economy.
“It’s not a coincidence that no high-tech companies have opened up here in the past month,” the unnamed executive said, according to Channel 12.
They explained that even if everyone agreed on the need for reform, the speed with which the government was pushing through the legislation was problematic. “You have to make compromise and have dialogue,” Barkat was reportedly told.
“Where are all the moderates in the Likud? Why aren’t their voices being heard?” one member of the group exhorted.
When it came to the impasse in efforts to broker compromise on the issue, Barkat reportedly laid the blame squarely on opposition leader Yair Lapid, who has demanded a 60-day freeze on legislation relating to the reform so as to conduct a dialogue.
Barkat, a multimillionaire businessman, had previously assured an increasingly anxious business sector that judicial reforms would not impact the country’s economy, telling a cyber tech conference: “When I speak with my peers around the world, this issue isn’t even mentioned.”
“Investors from all over the world are interested in the best entrepreneurs, ideas, or products and are looking for solutions – as long as Israel can provide that, it will remain a leader,” he added.
However, banking insiders reportedly estimate that around $4 billion has already been moved out of Israel in recent weeks as individuals and businesses seek to protect their wealth in an increasingly uncertain political and economic climate.
Also on Thursday, more than 400 ex-senior security officials signed a public letter urging President Isaac Herzog not to agree to any laws that contradict Israel’s core democratic values as he works to mediate a compromise version of the government’s judicial overhaul plan.
“The hasty legislative steps constitute a judicial revolution that will cause damage for generations to come,” said the letter by members of the Commanders for Israel’s Security group.
Signatories included former Shin Bet chief Nadav Argaman, former Mossad directors Tamir Pardo and Danny Yatom, ex-police commissioner Shlomo Aharonishki and former national security adviser Uzi Arad.
Additionally, some 550 former naval commandos from the IDF’s elite Shayetet 13 unit, including several of its ex-commanders, urged Defense Minister Yoav Gallant on Wednesday to oppose the legal shakeup.
Michael Bachner contributed to this report.