Top Bank of Israel official quits, says he can’t remain ‘while democracy in danger’

Prof. Moshe Hazan resigns from panel that sets Israel’s interest rate, claims judicial makeover would ultimately harm economy, make country a ‘banana republic’

Tens of thousands of Israelis protest against the government's planned judicial overhaul, in Tel Aviv, January 21, 2023. (Avshalom Sassoni/Flash90)
Tens of thousands of Israelis protest against the government's planned judicial overhaul, in Tel Aviv, January 21, 2023. (Avshalom Sassoni/Flash90)

Senior Bank of Israel official Prof. Moshe Hazan resigned Monday, and said he planned to take an active role in protests against the government’s judicial overhaul plans, stating he was finding it hard to stay at his job “while Israeli democracy is in danger.”

Hazan, a senior lecturer and an expert on macroeconomics and growth at Tel Aviv University, was a member of the bank’s six-person monetary committee which is tasked with setting the interest rate every six weeks. A replacement for him will be sought.

In Hazan’s letter of resignation, he cited his intent to “become involved in the sociopolitical sphere.”

Bank of Israel chief Amir Yaron expressed appreciation for Hazan’s contributions since joining the panel in 2017, a statement said. Hazan had been set to serve until 2025.

Recent weeks have seen mass protests against the government and its plans for sweeping changes to the country’s legal system, in steps that critics warn will undermine democracy.

Speaking with the Calcalist business daily, Hazan explained his decision: “I feel like I can’t sit and discuss the question of whether the interest rate will be hiked by a quarter or half of a percentage point while Israeli democracy is in danger.”

Prof Moshe Hazan (Bank of Israel)

Hazan took specific aim at the government’s judicial overhaul plan: “The government’s expected move, if passed, would severely harm the independence of the legal system and of the civil service, and this will cause grave harm to Israel’s democracy and economy. It is critical to voice this opinion, and I couldn’t have done that publicly as a member of the monetary committee.”

He added that the entire economy is based on checks and balances on the executive, and “the moment you politicize the [Supreme] Court, you make the government omnipotent. In such a situation, the economy won’t continue to perform as it is.”

He added: “We don’t want to become a banana republic.”

Hazan said he believes he can be far more useful as a public activist than as a Bank of Israel professional.

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