PM said to have sought support for judicial changes from ex-US Treasury head Summers
Netanyahu reportedly asked top economist to help calm business jitters, to no apparent avail; ex-Bank of Israel governor Flug says she hopes government heeds global warnings
As opposition to the government’s judicial overhaul has mounted among Israel’s leading finance, business, and tech executives, Prime Minister Benjamin Netanyahu reportedly sought to stem the criticism by lobbying a former top US economist for an endorsement of the plan.
According to Channel 12 news, some two weeks ago, Netanyahu called former US Treasury secretary Lawrence Summers in a bid to convince him to back the new government’s proposals, which will severely limit the courts’ powers over other branches of government and upend other parts of the Israeli judicial system.
The TV network said that Netanyahu and Summers spoke for about an hour, with the prime minister attempting to convince the former US official of the merits of his government’s plan. The premier presumably wanted Summers to push back against assertions from top Israeli economists that the plans to limit the judiciary would harm Israel’s economy.
Since the purported call, Summers has not spoken out for nor against the controversial government proposal.
Summers, who is Jewish, served in the cabinet of former president Bill Clinton, and was also director of the National Economic Council under former president Barack Obama. He also served as president of Harvard.
In 2013, Netanyahu sought to nominate Summers as the governor of the Bank of Israel — a post he declined. Both Netanyahu and Summers attended MIT in the mid-1970s.
The government’s proposals have come under severe criticism across the business sector in Israel, with tech professionals, money managers, and financial institutions warning that it can lead to a brain drain among professional, the outflow of funds from Israel and a decline in investments from abroad.
On Friday, Kan news reported that Netanyahu had personally called international credit ratings firms in an attempt to tamp down mounting concerns about the economic impact of his judicial overhaul plan.
Former Bank of Israel governor Karnit Flug said Sunday that she hopes Netanyahu’s government heeds warnings from JP Morgan and other financial firms that its far-reaching plans could negatively impact Israel’s credit rating.
Speaking with Army Radio, Flug added that she hopes for changes to the justice system only “with broad agreement.”
Flug was referring to an internal memo from leading US financial institute JPMorgan publicized on Friday, which warned that the judicial shakeup could have “medium-term investment and growth complications” and could affect Israel’s credit rating.
Flug’s comments echoed those of former Bank of Israel governor Jacob Frenkel, who told Channel 12 on Saturday that he is “very surprised” by Netanyahu’s plans.
“Countries that have weakened their judicial oversight are the countries where the citizens have suffered,” warned Frenkel, adding that with such a plan, “there is a danger of losing everything that has been achieved.”
Also Sunday, the heads of more than 50 leading consumer chains in Israel sent a letter to Netanyahu warning about the economic implications of the government’s bills, and calling for it to engage in dialogue with its opponents.
The executives expressed their concern that the “emerging legal revolution, as it is moving forward, is widening division among the people and may lead to serious damage to the Israeli economy.”
In an interview with CNN last week, Netanyahu said that he was ready to “hear counter offers” to his contentious proposals and defended them as necessary to counter what he called “extreme judicial activism.”