The Israeli Supreme Court won’t block immediate implementation of a new law curbing judicial oversight of government actions.
(Bloomberg) — The Israeli Supreme Court won’t block immediate implementation of a new law curbing judicial oversight of government actions.
Instead, the court told the Movement for Quality Government in Israel that its appeal against the law would be heard in September.
The parliament passed the law on Monday amid nationwide protests and a boycott of the vote by the opposition. The head of the Tel Aviv Stock Exchange Ittai Ben Zeev said Wednesday he was concerned that the current climate would hurt financial markets and the economy.
The law removes from judges the power to declare an appointment or decision invalid because it is “unreasonable.”
The ruling coalition of Prime Minister Benjamin Netanyahu says such a basis for judging is so subjective as to be open to abuse.
The opposition and protesters counter that because the executive in Israel controls the legislative branch, the only check on its power is the court system, which needs powerful tools, including reasonableness.
Without a strong court, they say, Israel will slide toward autocracy. The opposition is especially worried because Netanyahu is under indictment for fraud and bribery and has brought into government ultra-nationalist parties vowing to pursue hard-line policies.
The law’s passage led Israeli stocks, bonds and currency to tumble as investors worried that the new law — and others that may follow — will imperil the business environment.
Moody’s issued a report warning of significant risk. Morgan Stanley changed Israel sovereign credit to a “dislike stance,” saying it sees increased economic uncertainty.
Stock Chief Warning
On Wednesday, Ben Zeev urged the government to do whatever it takes to avoid suffering a reduced credit rating.
In a rare public critique, Ben Zeev said: “Moody’s report from yesterday is a wake-up call to the Israeli government — if it doesn’t come to its senses soon, Israel will be facing a UK-style financial crisis.”
Netanyahu had waved off the Moody’s report as a temporary blip. But Ben Zeev said that Moody’s is an objective, neutral international organization that bluntly stated that although Israel’s economy is strong, it’s on a slippery slope.
“This is a reflection of Israel’s economy through international eyes, and we must not ignore it,” he said. He urged Netanyahu and Finance Minister Bezalel Smotrich to get in touch with rating agencies and prevent a downgrade to Israel. Without a change of policy, he said, Israel will be downgraded.
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