'We're in freefall. This is a tsunami,' participants warn

‘Stop this madness’: Tech, manufacturing groups back Herzog in judicial deal push

Four major organizations urge government to halt legislative proceedings and start dialogue, warning of damage to economy, housing market; president meets with 30 executives

Sharon Wrobel is a tech reporter for The Times of Israel.

Israeli manufacturers, industrialists, and tech firms urge government and opposition to start dialogue for compromise deal on proposed judicial changes. (Courtesy)
Israeli manufacturers, industrialists, and tech firms urge government and opposition to start dialogue for compromise deal on proposed judicial changes. (Courtesy)

The heads of four major manufacturer and business organizations reiterated on Tuesday their public call to jumpstart dialogue for a compromise deal on the government’s planned judicial overhaul and warned of the social and economic damage already inflicted.

Newspaper ads signed by the heads of the Manufacturers’ Association of Israel, the Federation of Israeli Chambers of Commerce, the Israel Builders Association and the Israeli High-Tech Association urged both supporters and opponents of the proposed judicial changes to sit down and work toward a compromise as pushed by President Isaac Herzog.

“We stand behind the president’s initiative in full. Politics will wait, the unity of the people comes first. Sit, talk and agree,” the organizations wrote in the ads, which were headlined “Leadership demands courage.”

Last week, the manufacturers and industrialists issued a similar plea in newspaper ads. Herzog, who has been spearheading efforts to advance a compromise deal, said on Monday that he is devoting all his time to finding a solution to the judicial overhaul crisis, saying the situation is “a very serious” constitutional and social crisis.

On Tuesday, Herzog met with 30 entrepreneurs and business executives to discuss the repercussions of the proposed legal revamp on the economy and for doing business in and outside of Israel.

“We’re in freefall. This is a tsunami. People around the world are telling us, we won’t bring businesses here… We’re calling on you to stop this thing and get back to talking,” those who were present were quoted as saying by Channel 12 news. “It’s possible to fix systems, but not with a gun to your head…. We may have missed the train, but every train has an emergency brake. Stop this madness.”

The president’s planned proposal is “the last bullet in the gun. Maybe it will prevent the fall into the abyss. You must be sure that you have wide public support,” they reportedly told him.

Herzog reportedly vowed not to let fall into the abyss.

After the meeting, the executives and entrepreneurs released a statement saying they would not publicly comment on what was discussed, but hailed Herzog’s efforts to facilitate compromise talks as having “the utmost importance.”

Although the coalition has signaled said it is open to dialogue over the overhaul, it has refused to slow the legislative process. The Knesset early Tuesday advanced a key bill that will make it possible to imbue laws with preemptive immunity against judicial review. It will need to pass two more Knesset votes to become law.

If enacted as planned, the package of proposed legislation would bring the judiciary largely under political control, almost completely preventing the High Court of Justice from acting as a brake on the executive and legislature, and giving near-unlimited power to the governing majority. The coalition has said it seeks to enact all of its sweeping reforms by the time the Knesset breaks for Passover, in just over two weeks.

Workers from tech sector protest against the government’s planned judicial overhaul, in Tel Aviv, on March 9, 2023 (Tomer Neuberg/Flash90)

“Our concern for the fate of the Israeli state and economy is genuine and therefore we felt the need to act,” said Ron Tomer, president of the Manufacturers’ Association of Israel, on Tuesday. “We have only one state and we need to preserve it and the unity of the people – it is this togetherness that has brought about the strength and resilience of Israel’s society and economy.”

“Breaking our togetherness will hurt us all,” Tomer cautioned.

Over the past 10 weeks, hundreds of thousands of Israelis from all walks of life have taken to the streets in protest of the judicial changes and to protect the country’s stable democracy and system of checks and balances. In recent weeks, the coalition has brushed off ever-multiplying warnings by world leading economists, jurists, diplomats and top former central bank officials of potentially irreversible consequences for Israel’s economy, financial stability, social cohesion, security, and world standing.

Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, called on the sides to stop deliberating and insisted that there is no way out other than fully backing Herzog’s proposal for a compromise deal.

“One must be completely blind or decidedly dull in order not to understand or not to see the terrible and unprecedented damage that the proposed reform as a whole is causing the State of Israel,” said Lynn. “Whether it is creating a rift between people and polarization, damaging the economy, eroding Israel’s standing vis-à-vis its friends in Western countries, disrupting relations with the US, or rocking the defense establishment.”

Last week, Moody’s credit rating agency issued a warning that Israel’s planned legal overhaul could weaken the country’s institutional strength and “if implemented in full, the proposed changes could materially weaken the strength of the judiciary and as such be credit negative.” Earlier, Fitch Ratings affirmed Israel’s A+ credit rating with a stable outlook, but also warned that the judicial changes could lead to “worse policy outcomes or sustained negative investor sentiment and thereby have a “negative impact” on the country’s credit profile.

“With every day that passes in a state of uncertainty affecting our mood and every part of the business sector, the economic damage to every citizen in Israel as a whole becomes bigger,” commented Raul Srugo, president of the Israel Builders Association. “It starts with stagnation in the housing market and day by day the problem of the shortage of housing solutions deepens and from there and onwards, this will affect every economic action of every citizen in Israel.”

Israel’s housing market is characterized by high demand due to population growth and inadequate supply, driving up housing prices at dizzying rates in recent years.

Housing prices across the country have been climbing steadily since the second half of 2018, with a brief pause in 2020 at the height of the COVID-19 pandemic. Prices soared as much as 20% over the past year.

Times of Israel staff contributed to this report.

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