Cabinet minister: Bank of Israel chief sabotaging economy with overhaul criticism

Amichai Chikli accuses Amir Yaron of putting politics first by giving foreign press gloomy predictions about government’s plans

Diaspora Affairs Minister Amichai Chikli, seen during a discussion and a vote in the assembly hall of the Knesset, in Jerusalem, on March 6, 2023. (Yonatan Sindel/Flash90)
Diaspora Affairs Minister Amichai Chikli, seen during a discussion and a vote in the assembly hall of the Knesset, in Jerusalem, on March 6, 2023. (Yonatan Sindel/Flash90)

Diaspora Affairs Minister Amichai Chikli said Tuesday that Bank of Israel Governor Amir Yaron had sabotaged the economy with his criticism of the government’s plan to drastically overhaul the judiciary.

Chikli, who is also minister for social equality, clarified that he was not commenting on Yaron’s monetary policies — including raising the interest rate Monday — but rather his public remarks about the overhaul.

“His process is more political than economic,” Chikli told the Kan public broadcaster. “It serves the elites, not the citizens of Israel.”

“I very much regret the conduct of the governor of the Bank of Israel. As soon as he went to a foreign network and gave disaster prophecies about Israel’s economy, he sabotaged it,” he said, referring to an interview with CNN that Yaron gave in March in which he criticized the overhaul.

“The forecast you predict is the forecast you make happen,” Chikli said.

Chikli later tweeted that his remarks about Yaron were specifically referring to his gloomy expectations of the economic impact of the judicial reform.

“I did not express any criticism of his professional decisions regarding the interest rate increase,” he said.

Bank of Israel Governor Amir Yaron arrives at a cabinet meeting on the state budget at the Prime Minister’s Office in Jerusalem, February 23, 2023. (Alex Kolomoisky/POOL)

On Monday Yaron lifted the benchmark interest rate for the ninth time in a row, raising its key lending rate by 25 basis points to 4.5 percent and citing “tremendous” uncertainty for the economy over the government’s judicial overhaul plan.

That decision was panned by Communications Minister Shlomo Karhi. “With such opaqueness, on the eve of Passover, perhaps it is possible to put a robot in the position of governor, who will make decisions on interest rate increases based on an objective algorithm, disconnected from the people,” Karhi tweeted after the rate hike.

On Saturday night, hundreds of thousands of people demonstrated throughout the country against the government’s judicial overhaul plans, despite Prime Minister Benjamin Netanyahu’s hard-right coalition last week pausing the legislation on the proposed changes to allow dialogue on its highly divisive efforts to weaken the justice system.

Among the demonstrators are many leading entrepreneurs, investors and tech workers, who have in recent months voiced their opposition to the proposed changes which would grant the government more weight in the selection of judges while curbing the Supreme Court’s power to strike down legislation.

The main concern is that the judicial overhaul will erode democracy and weaken checks and balances, which in turn is feared will make venture capitalists and other business people leery of investing in the country, triggering an economic slowdown.

Negotiations between the government and opposition aimed at compromising on the coalition’s contentious judicial overhaul legislation have been taking place at President Isaac Herzog’s office.

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