Leading investment firms warn of uncertainties caused by legal overhaul

In letter penned to Justice Minister Levin and opposition leader Lapid, association of investment houses calls for sides to hold compromise talks

Illustrative: The Psagot Investment House headquarters in Tel Aviv. January 22, 2022. (Nati Shohat/Flash90)
Illustrative: The Psagot Investment House headquarters in Tel Aviv. January 22, 2022. (Nati Shohat/Flash90)

A group of leading Israeli investment firms that manage hundreds of billions of shekels in public and pension funds published a letter Sunday warning they were concerned the government’s proposed judicial overhaul would cause uncertainties in the financial market.

The heads of the investment houses called on the opposing sides to hold compromise talks as proposed by President Isaac Herzog.

“As those who manage the investment houses and serve as the leading institutional investors in Israel, manage hundreds of billions of shekels of public money, for the public, we saw the importance of a clear call to all parties to enter into immediate, honest, and serious negotiations,” the letter by the Israel Investment Houses Association read.

The letter, addressed to Justice Minister Yariv Levin and opposition leader Yair Lapid, said the investment firms “view with concern the consequences of uncertainties on the financial markets and public savings.

“Therefore, all parties are called to show responsibility and leadership for the sake of maintaining stability and the social and economic conditions that have made possible the impressive growth of the economy in the last 20 years,” the letter added.

The signees included the heads of Meitav, Altshuler Shaham, IBI, Yelin Lapidot, Psagot, Phoenix, Epsilon, and More.

Yesh Atid chair Yair Lapid (L) speaks during a joint press conference with fellow opposition party head at the Knesset on February 13, 2023. Justice Minister Yariv Levin holds a press conference at the Knesset on January 4, 2023. (Olivier Fitoussi, Yonatan Sindel/Flash90)

The legal overhaul, advanced by Levin and backed by Prime Minister Benjamin Netanyahu, would grant the government total control over the appointment of judges, including to the High Court, severely limit the High Court’s ability to strike down legislation, and enable the Knesset to re-legislate laws the court does manage to annul with a bare majority of just 61 MKs.

Critics say that along with other planned legislation, the sweeping reforms would undermine Israel’s democratic character by upsetting its system of checks and balances, granting almost all power to the executive branch and leaving individual rights unprotected and minorities undefended.

Netanyahu and other coalition members have dismissed the criticism.

Organizers of a protest movement against the judicial overhaul have declared Monday a “national day of struggle,” which, for the second week in a row, will include a large rally outside the Knesset, as well as demonstrations in various cities and the shuttering of some businesses.

The demonstrations are meant to coincide with the expected first reading in the Knesset of legislation that would give the coalition control over the selection of judges (as well as of a bill to render Basic Laws immune to judicial oversight; discussion will also be continuing on other parts of the overhaul package in the Knesset’s Constitution, Law and Justice Committee).

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