Bank chiefs, tech leaders, El Al, Mobileye heads participate

Israeli business leaders warn US envoy legal overhaul could spell ‘end’ of democracy

15 top tech, business figures meet with US Ambassador to Israel Tom Nides; most express deep concern over proposed radical changes to judiciary, impact on economy, investments

US Ambassador to Israel Tom Nides visits the Yad Vashem Holocaust memorial and museum in Jerusalem on December 2, 2021. (Olivier Fitoussi/Flash90)
US Ambassador to Israel Tom Nides visits the Yad Vashem Holocaust memorial and museum in Jerusalem on December 2, 2021. (Olivier Fitoussi/Flash90)

US Ambassador to Israel Tom Nides met on Thursday with over a dozen leading Israeli business and tech executives, most of whom warned him that the Netanyahu government’s planned overhaul of the judicial system would likely harm Israel’s economy, according to an Israeli TV report.

The meeting included 15 CEOs and senior representatives of Israeli industry heavyweights such as El Al, Bank Hapoalim, IsarCard, and communications firm Partner, as well as the former CEO of Bank Leumi, and the founders of cybersecurity giant Checkpoint and Mobileye, Intel’s Jerusalem-headquartered autonomous driving subsidiary.

According to Channel 12, some of the executives warned that should sweeping, radical changes to the judiciary led by Justice Minister Yariv Levin move forward, with Prime Minister Benjamin Netanyahu’s full backing, it could spell “the end” of Israel’s democracy and harm its economic growth. The report did not attribute the quote to anyone.

Others expressed their concern that such a move would lead credit agencies to downgrade Israel’s economic ratings and scare away foreign investors, as Bank of Israel Governor Amir Yaron reportedly outlined to Netanyahu this week amid mounting criticism over the judicial shake-up from leading business figures and economists.

Two of the 15 business figures said they didn’t think the proposed radical changes to the judiciary would negatively impact the economy, according to the report.

Israel’s celebrated tech sector, one of the most solid engines of economic growth, relies heavily on venture capital and other investments from foreign companies and funds.

The Channel 12 report indicated that most of the business leaders at the meeting with Nides were opposed to and concerned by the planned overhaul, according to which the High Court’s capacity to strike down laws and government decisions would be severely restricted, and there would also be an “override clause” that would enable the Knesset to re-legislate any such struck-down laws with a bare majority of 61.

The proposed changes would also give the government complete control over the selection of judges; prevent the court from using a test of “reasonableness” to judge legislation and government decisions; and allow ministers to appoint their own legal advisers, instead of getting counsel from advisers operating under the aegis of the Justice Ministry.

Prime Minister Benjamin Netanyahu (right) and Justice Minister Yariv Levin attend the weekly cabinet meeting at the Prime Minister’s Office in Jerusalem on January 15, 2023. (Yonatan Sindel/Flash90)

The meeting between Nides and the business leaders was scheduled long before the controversies over the judicial overhaul arose, according to the report, but the sit-down focused on the issue due to concerns among the attendees that Nides had hitherto not fully grasped the full significance of the proposed legislation nor the potential negative consequences to the Israeli economy. By the end of the session, such concerns had been alleviated, the report said.

The report cited no sources.

On Wednesday, hundreds of Israeli economists published an “emergency letter” warning that the far-reaching judicial shakeup being advanced by Netanyahu’s hardline government could have grave implications for the economy.

“The concentration of vast political power in the hands of the ruling group without strong checks and balances could cripple the country’s economy,” the signatories cautioned.

They also invoked the risk of a “brain drain” and the relocation from Israel of research and development centers, as well as the danger of a reduction in the country’s credit rating.

Among the signatories were both right- and left-leaning senior academics, including Nobel Prize winner Prof. Daniel Kahneman; former Netanyahu economic adviser and National Economic Council head Prof. Eugene Kandel; Prof. Omer Moav, a former adviser to the finance minister; Prof. Avi Ben Bassat, a former director of the Finance Ministry; and Prof. Manuel Trajtenberg, who held a string of key government positions.

The letter came a day after Yaron met with Netanyahu to press the potential consequences and relay warnings made by senior economic figures and officials from credit rating firms during his recent meetings at the World Economic Forum in Davos earlier this month.

That meeting took place hours after hundreds of tech workers held an hour-long strike to protest the planned changes.

Israeli tech company employees stage a one-hour protest in Tel Aviv against judicial overhaul, January 24, 2023. (Courtesy)

The planned judicial overhaul has sparked weekly mass protests and public petitions by various officials, professionals, private companies and other bodies.

Over 100,000 people demonstrated against the proposed shake-up in Tel Aviv last Saturday night, with thousands more at other demonstrations including in Jerusalem, Haifa and Beersheba.

Another massive demonstration in Tel Aviv is planned for Saturday evening.

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