Citi cautions investors over Israel, says situation ‘much more tricky and dangerous’

In an update on the judicial overhaul, Citi warns of a “much more tricky and dangerous” environment after the government passed a bill blocking courts from exercising judicial review over the “reasonableness” of its decisions, counseling investors to hold off until the dust settles.

Michael Wiesen, a vice president at the US bank, outlines a scenario in which Israel faces a “constitutional crisis,” noting the High Court petitions filed against the legislation.

“If they decide to debate it and strike it down, we could find ourselves in a constitutional crisis should the government decide to ignore their ruling,” he writes. “However given this has been passed as a ‘Basic Law,’ it’s not very likely the court will seek to strike it down.”

He also refers to speculation Prime Minister Benjamin Netanyahu’s government could fire Attorney General Gali Baharav-Miara, amid growing calls by coalition figures to can her.

“This however would be a dangerous move given the fierce reactions from markets as well as international voices, most probably rating agencies,” Wiesen says.