The judiciary fight is fueled by deep distrust; that makes compromise elusive

Why Justice Minister Yariv Levin is in such a rush, foreign investors are increasingly worried, and President Herzog’s call for dialogue may fail

Haviv Rettig Gur

Haviv Rettig Gur is The Times of Israel's senior analyst.

Israeli reserve soldiers, veterans and activists rally outside the Supreme Court in Jerusalem, protesting against the government's planned judicial overhaul, on February 10, 2023. (Yonatan Sindel/Flash90)
Israeli reserve soldiers, veterans and activists rally outside the Supreme Court in Jerusalem, protesting against the government's planned judicial overhaul, on February 10, 2023. (Yonatan Sindel/Flash90)

The architects of the government’s judicial overhaul are afraid, and they’re not ashamed to admit it.

They don’t fear the protests, they don’t fear polls showing declining public support for their reforms. Or the steady stream of reports about foreign investments being canceled or money being pulled out of the country by spooked multinationals. They’re unfazed by President Isaac Herzog’s warning of a looming “societal collapse.”

These activists, led by Justice Minister Yariv Levin and Knesset Constitution, Law and Justice Committee Chairman MK Simcha Rothman, have been planning and hoping for this day for too long to be diverted from their objective. They believe that Israel will emerge from their reforms stronger and more democratic.

They are willing to upset the applecart and are undaunted by the howls of outrage from their opponents. Indeed, the fierce resistance their plan has encountered only makes them more determined to press on despite the headwinds. Each new protest, each new ex-Netanyahu confidant like former Mossad chief Yossi Cohen or former chief economic adviser Eugene Kandel who joins the ranks of the opposition, only drives home to these advocates the rarity of this opportunity.

An almost unique concatenation of factors has opened a window that may not reopen again in their political careers: A unified rightist coalition that backs dramatic and controversial judicial reform, a prime minister either supportive of the plan or too weak to resist it (there is disagreement on this point within the coalition), and key posts in the Knesset and government held by the plan’s most passionate supporters.

If the current window closes with the reform undone, they believe, that singular opportunity will have been squandered.

Then incoming Prime Minister Benjamin Netanyahu (right) with incoming justice minister Yariv Levin in the Knesset on December 13, 2022. (Yonatan Sindel/Flash90)

They are not afraid of the opposition, they’re afraid of slowing down.

When Herzog on Sunday called for dialogue and a freeze of the legislative rush, Levin welcomed such a dialogue – as long as it didn’t slow the legislation.

“To ensure that that dialogue doesn’t become a way to foot-drag, delay and prevent a real and meaningful reform in the judicial system, the dialogue can’t be linked to the advance of the legislative process,” he declared. If the opposition wanted a “dialogue,” it had better hurry: “Alongside the advancing legislation, we all have enough time for dialogue and to reach understandings before the second and third readings.”

When asked by The Times of Israel this week whether the patchwork of reforms that made up the overhaul plan couldn’t be integrated into a broader constitutional effort that added new checks on the government’s power in place of the weakened judiciary, Rothman bluntly rejected the idea.

“We cannot have any moment to talk, to think, to speak, to negotiate, to agree if we don’t have the certainty that what we will decide [will be implemented]. You need to trust the system in order to compromise, in order to get to an understanding,” he said.

No trust is currently possible, he explained, when lawmakers hammering out a broader constitution can’t be sure “the Court will respect the constitution and the compromises that must come with it… So the first step in ever trying to make a constitution, half a constitution, a procedural constitution in Israel is the trust of the people, that whatever they decide will be respected by the court and by the other branches of government.”

MK Simcha Rothman, center, at the Knesset Constitution, Law and Justice Committee meeting at the Knesset on February 13, 2023 (Yonatan Sindel/Flash90)

First, you weaken the court, then you can consider introducing other constitutional checks in its stead.

Follow the money

And while the plan’s champions push ahead with their legislation, the potential costs of the plan continue to rise.

“37 high-tech companies remove 780 million dollars from Israel and are stopping the entry of 2 billion dollars.” “Intel delays a meeting [with Economy Ministry officials] on expanding its investments in Israel by 20 billion dollars.” “Israeli businessman pulls some 600 million shekels from his company’s deposits in Bank Hapoalim.”

Those are recent front-page headlines from Israeli business journals all centered on the financial fallout from the overhaul. The Twitter feeds of economic reporters are even more somber.

On February 3, Channel 12’s Amalya Duek shared the “concerns” of JPMorgan, the world’s largest bank by market capitalization.

Tech workers march in Tel Aviv to protest against the government’s planned overhaul of the judicial system, January 31, 2023. (Tomer Neuberg/Flash90 )

On February 12, Channel 13’s Matan Hodorov shared a letter to Bank Hapoalim from the billionaire high-tech investor pulling the 600 million shekels ($170 million) cited in the headline above in which he explained his reasons: “We’ve received a request from a board member representing a very large American fund that invested significant sums in the company” who “expressed his and the fund’s fear over the possible effects of the judicial reform…. As he put it, alongside the many risks that already exist in the business world, this is not a risk that the fund is interested in dealing with or suffering from its consequences.”

Assaf Rappaport, CEO of the Israeli cybersecurity firm Wiz, spoke to Channel 13 last week about growing investor worry. As he put it, his investors are asking him, “‘What the f**k, what’s happening in the country, where are these things going?’ We try to calm them, to explain that things will be okay. Still, they have very, very sharp senses for what’s happening. When they read the reports from Barclay’s, from HSBC, from JPMorgan, the concern rises and they ask themselves, ‘Why take this big risk of putting the money [in Israel]?’”

“This is all happening behind the scenes,” one investment firm official told the Calcalist business journal this week. “Not out of political considerations but simply for risk management.”

Finger in the dike

These reports are still only a trickle, but everyone understands that they could turn into a flood.

As early as January 25, after the first round of such reports ran in the press, and after a letter by top economists, including Netanyahu’s own former chief economic adviser Kandel, warned of the potential harm to the economy if the judicial reform advanced, Netanyahu convened an urgent press conference.

Prime Minister Benjamin Netanyahu gives a press conference with Finance Minister Bezalel Smotrich at the Prime Minister’s Office in Jerusalem, on January 25, 2023. (Yonatan Sindel/Flash90)

Standing alongside Finance Minister Bezalel Smotrich and Economy Minister Nir Barkat, Netanyahu made the right’s case about the economic warnings, a case the right has stuck to in the weeks since even as major global banks, Nobel-winning economists and countless others added their voices to the remonstrations.

These gloom-and-doom warnings, Netanyahu’s argument went, are little more than the center-left’s scorched-earth strategy of generating so much distrust in the Israeli economy that it brings about the very collapse it is ostensibly warning against. It’s a cynical political campaign masquerading as an economic warning.

Netanyahu slammed the “tsunami of lies about the collapse of the economy” and demanded the opposition “behave responsibly.”


There is a thread that connects all these phenomena — the center-left’s conviction that the country’s most fundamental freedoms are at stake; Levin and Rothman’s headlong rush to pass their reforms, despite (or because of) growing opposition; and the multiplying signals of possibly dire economic consequences that may await the country at the end of the process.

That unifying thread is distrust.

Opposition leader Yair Lapid attends a rally against Prime Minister Benjamin Netanyahu’s new government and its proposed judicial overhaul, in Tel Aviv on January 21, 2023. (Gili Yaari/Flash90)

Rothman and Levin do not believe they can afford to stop the legislative push because they do not trust the opposition to negotiate in good faith without a sword of Damocles hanging over their heads. They do not trust the High Court, as presently constituted, to let any final compromise stand. From Levin’s perspective, the opposition’s latest offers to negotiate only came about because it was thrown off balance by the fast pace of the legislation. If that pace is slowed, that advantage will be lost, and with it, possibly, the very possibility of reform.

Meanwhile, the center-left has good reason for distrusting the would-be reformers. The overhaul appears likely to leave essentially unchecked governmental power in the hands of a united and increasingly uniform coalition. Rothman and Levin have spent recent weeks focused laser-like in their public comments on the Supreme Court’s unusual powers — on the thing they want to dismantle — in order to avoid answering questions about the no less unusual powers their plan will claim for the ruling coalition.

Meanwhile, with the occasional exception of Rothman, the leaders behind the reform have largely refused to explain themselves in any detail to the public. Levin has almost entirely refused to interview on the overhaul (with the notable exception of a supportive right-wing podcast) while Netanyahu has for months systematically refused to be interviewed by Israeli media outlets that don’t fervently support him.

None of this is accidental. The distancing from the press is as essential to the strategy as the speed of the legislation: It avoids costly slip-ups or embarrassing questions and allows the champions of the reform to set the agenda and determine the pace of events.

When nevertheless cornered, the right’s answer to opposition concerns usually boils down to, “Trust us.” Right-wing spokespeople explain that the coalition is less uniform than it appears from across the aisle, and that its disparate parts will restrain each other.

These arguments might be more convincing if they weren’t routinely drowned out by the rightist voices who insist on depicting the judicial reform not as a constitutional “rebalancing” but as part of half the country’s war on the other half.

Likud MK David Amsalem reacts during a plenum session of the Knesset on December 19, 2022. (Olivier Fitoussi/Flash90)

At the Knesset podium on Monday, minister-in-three-different-ministries David Amsalem explained its purpose thus: “This struggle isn’t about laws, it’s about whether an elite and ‘the nobility’ will continue to run the country, and we will remain the vassals.”

On Sunday, shortly after Herzog urged dialogue, Communications Minister Shlomo Karhi had this response: “During the fraud government [a reference to last year’s Bennett-Lapid coalition], when sacred systems were abused and cursed, I didn’t hear anyone proposing compromise. When they persecuted yeshiva students and Torah scholars, trampled Likudniks, tradition, Zionism, there was no call for dialogue. Hypocrisy is the name of the game and we’ve long ago stopped taking part in it. Push on with the reforms with full force.”

Such talk isn’t the exception. It’s the rule.

And it suggests that Netanyahu is wrong about the center-left’s economic panic-mongering. No fake anxiety is triggering international financial disquiet. The anxiety is real, the opposition’s fear of right-wing intentions seems substantiated by right-wing politicians themselves on an almost daily basis.

Israel is tearing itself apart, with polls suggesting the divide runs deeper than just the chattering classes. It is locked into a discourse shaped by mutual distrust. That distrust is why Levin refuses to pause the legislation to allow for dialogue, and why opposition chief Yair Lapid refuses to negotiate without such a pause. Neither believes the other will come to the table in good faith.

And it is why foreign investors and banks are growing spooked. It isn’t just that those parts of Israeli society that attract the bulk of foreign investment – the secular, liberal sections of Tel Aviv and nearby cities – are overwhelmingly the parts that feel themselves under attack from the new government. Israelis are making an excellent case to each other, and therefore inevitably to the world, that the other side cannot be trusted, that judicial reform is a zero-sum game, and that Israel’s near future will therefore be one of constant turmoil. Buyer beware.

Most Popular
read more: