Israeli shares rise and shekel gains in anticipation of pause to judicial overhaul

Stores, banks, and offices around the country begin to close, joining the nationwide strike against the government’s plans; Discount Bank warns of economic impact of unrest

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

The Tel Aviv Stock Exchange, in the center of Tel Aviv, December 25, 2018. (Adam Shuldman/Flash90)
The Tel Aviv Stock Exchange, in the center of Tel Aviv, December 25, 2018. (Adam Shuldman/Flash90)

Israeli shares rose and the shekel appreciated against the US dollar on Monday as the national labor federation of workers’ union declared a general strike to heighten pressure on Prime Minister Benjamin Netanyahu to announce a halt to the contentious judicial overhaul.

The local currency appreciated more than 1% to 3.55 against the greenback in intraday trading after hitting a four-year low earlier this month as Israeli lawmakers advanced a significant part of the controversial judicial overhaul, to cement government control over judicial appointments and revoke the High Court’s ability to review Basic Laws.

Tel Aviv Stock Exchange’s benchmark TA-125 index gained 1.8% and the TA-35 index of blue-chip companies added about 2% at the close of trading in Tel Aviv. The TA index of the five largest banks rose 1.4% and the TA-Insurance & Financial Services jumped 3.5%.

Netanyahu is expected to make a statement later on Monday announcing a pause in the overhaul legislative push

Arnon Bar-David, head of the Histadrut labor federation, the country’s biggest union, announced a “historic” labor strike in an attempt to “stop the madness” of the government’s controversial judicial overhaul and said it could begin as soon as Monday as long as Netanyahu does not announce a halt to the judicial overhaul plans. An immediate freeze on departures from Ben Gurion airport has already taken effect.

Following the declaration of the general strike, businesses, tech firms, shopping malls, and local authorities around the country began to announce that they are shutting down operations.

Israelis protest outside the Knesset government’s planned judicial overhaul, in Jerusalem on March 27, 2023 (Erik Marmor/Flash90)

Both Bank Hapoalim, one of the country’s largest banks, and Israel Discount Bank joined the strike and put out statements that they are closing their branches starting this afternoon. Discount Bank urged lawmakers to immediately pause the advancement of the proposed judicial changes.

“Israeli society is facing fateful days for its future and resilience. This is not a political or party dispute, but rather the emergence of a deep rift in society,” Discount Bank CEO Uri Levin wrote in a note to employees. “The social rift is happening against the background of significant economic variables, primarily a global economic crisis, a rising interest rate environment and inflation that has yet to be curbed.

“These, combined with the current unrest on the Israeli street, are poised to have a dramatic effect on Israeli society, the economy, the bank and its customers,” Levin warned.

Tech entrepreneurs, startup founders and workers have been among the various groups vocally protesting the judicial overhaul on the grounds that it will erode democracy and weaken checks and balances. One of the major worries in the tech sector is that the moves will make venture capitalists and other money makers leery of investing their money in the country, triggering an outflow of funds.

“The startup nation is in danger,” Start-Up Nation Central, an organization that connects international businesses and government leaders with Israeli technology, posted on Twitter, announcing that it is joining the strike.

“We hope to return to operate as soon as possible for the benefit of the Israeli economy in a democratic country,” the post read.

Israelis opposed to Prime Minister Benjamin Netanyahu’s judicial overhaul plan set up bonfires and block a highway during a protest moments after the Israeli leader fired his defense minister, in Tel Aviv, Israel, Sunday, March 26, 2023. (AP Photo/Ohad Zwigenberg)

Last night, the heads of the Manufacturers Association of Israel and the Association of Contractors and Builders announced that they will not join a general strike.

“We understand the magnitude of the hour, but a strike is not the solution,” the two organizations said in joint statement. “A strike will only harm the country and cause controversy and the widening rift to seep into the workplace.”

While it is difficult to calculate the direct economic cost of the strike at this stage, in the past a full nationwide strike was estimated to incur daily damages of a few billion shekels.

The manufacturers, contractors, and builders reiterated their call to stop the legislative processes immediately, urging coalition and opposition to sit down to talk to reach a broad consensus and restore order.

“The Israeli economy will not survive the continued rift – a strong economy needs security and a strong and united people, and we are losing all of this,” they said in a joint statement.

Hundreds of thousands of demonstrators streamed into the streets across the country last night as the premier fired Defense Minister Yoav Gallant, after his former ally warned him that the overhaul was causing damage to national security.

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