Israeli retail executives urge gov't to find judicial reform compromise

The letter urged Israeli political leaders to approach a compromise regarding judicial reforms.

 Prime Minister Benjamin Netanyahu gives a press conference about the judicial reform following warnings from many economic experts. (photo credit: YONATAN SINDEL/FLASH90)
Prime Minister Benjamin Netanyahu gives a press conference about the judicial reform following warnings from many economic experts.
(photo credit: YONATAN SINDEL/FLASH90)

In a letter to Prime Minister Benjamin Netanyahu and other key members of the government, more than 50 retail chain executives warned against the potentially devastating effect that the government’s proposed judicial reform may have on the economy, urging them to hear out critics and develop a more reserved plan.

“[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. As our public leaders, you have the ability to reach a compromise and there is no doubt that today, more than ever, compromise is called for,” the letter read.

“[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. As our public leaders, you have the ability to reach a compromise and there is no doubt that today, more than ever, compromise is called for.”

Retail letter

“We are following with great concern the developments in the public sphere and the growing rifts between the various parts of the nation. We are proud Israelis, ‘one human tapestry’ that voted for all the parties in Israel,” it continued. “We, among the backbones of the Israeli economy, respect voters’ decisions of course, while at the same time believing that in a democratic country we must listen to each other.”

The letter, which was addressed to Netanyahu, President Isaac Herzog, High Court of Justice President Esther Hayut, Knesset Speaker Amir Ohana and opposition leader Yair Lapid, urged the leaders to approach a compromise with the parties concerned about the potential damage that the legal overhaul could cause.

“Show leadership, start a dialogue and ensure that the amendments carried out will be done in broad agreement, in order to prevent a rift in the people,” it read.

hat the amendments carried out will be done in broad agreement, in order to prevent a rift in the people,” it read.

 Israel's Justice Minister Yariv Levin holds a press conference at the Knesset, the Israeli Knesset in Jerusalem, on January 4, 2023.  (credit: OLIVIER FITOUSSI/FLASH90)
Israel's Justice Minister Yariv Levin holds a press conference at the Knesset, the Israeli Knesset in Jerusalem, on January 4, 2023. (credit: OLIVIER FITOUSSI/FLASH90)

Letter after letter

This is the latest in a series of letters that have been sent from concerned parties urging the government to reevaluate the decision to reform the judicial system – or at least the way in which it’s done.

Last week, dozens of former Economic Ministry directors and officials released an open letter that raised a red flag surrounding the economic impact of the proposed reforms.

“There is a serious concern that the weakening of the judicial system will lead to long-term damage to the growth trajectory of the economy and the quality of life of the residents of Israel,” said the former ministry directors.

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“Research shows that damage to the quality of government institutions is almost irreversible. An institutional balance that supports growth is delicate, and a deviation from it may be long-term since harmful political and economic institutions tend to perpetuate themselves over many decades,” said the officials.


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BEFORE THAT, over 360 economists signed an open letter on the same subject, which was sent to the prime minister on January 25.

“The damage to the independence of the judiciary will greatly increase the likelihood of damage to the credit rating of the Israeli government, and to the capital raising of Israeli companies,” read the letter, which featured Nobel Laureate Daniel Kahneman as a cosigner.

“The damage to the ability of the government and companies in the business sector to raise funding sources will lead to a decrease in the scope of investments, and this will harm first and foremost the Israeli hi-tech industry, the growth engine of the economy. This damage is expected to intensify in view of the emerging crisis in the industry, and the possibility that hi-tech companies will move their centers outside the country’s borders.”

Also co-signed on the letter is Prof. Dan Ben-David, head of the Shoresh Institution for Socioeconomic Research and an economist at Tel-Aviv University. He told The Jerusalem Post that the increasing number of letters sent from the nation’s experts may culminate into positive results.

“Each one alone is just a snowball. But when taken together, they have the potential to turn into an avalanche,” he said. “We are basically talking about letters not just by nearly all of Israel’s economists, but by the deans of all the law schools in Israel’s research universities as well the presidents of all the research universities.

“Academics do not have any power of their own. But they do represent the highest levels of independent professional opinions in a country. Add to them the letters by people who ran the government ministries and defended Israel externally and domestically (many appointed by Netanyahu) – alongside the dire warnings from the country’s top business and banking leaders – and you have an unprecedented wave of cautionary notices that at some point may cause individuals and firms to initiate something akin to a bank run. Except that this time, the ‘bank’ will be Israel,” Ben David said, adding that there have been signs that Israel would bring itself to such a dire position for a while now.

“Israel’s internal demographics have been taking us to this existential point of no return for years. The combustible merging of the haredi parties (representing a society that is doubling its share in the population every 25 years) who deprive their children of a future in a modern economy and an understanding of a modern democracy, the Jewish supremacists and a head of state on trial for corruption simply acted as a turbocharger to give us a glimpse of what the future holds if we don’t do something about it while we still can,” he said.

Who’s ready to talk?

In an interview with CNN on Wednesday, Netanyahu stated that he was prepared to “hear counter offers” to the proposed judicial reform, which he still firmly supports

“Israel is right now an outlier... Israel has the most extreme judicial activism that’s gone off the rails and we’re trying to bring it back to where just about all the democracies are, both in the selection of judges and the balance between the various branches of government,” said the premier.

“Correcting or restoring Israeli democracy will make democracy stronger, [the] judiciary will remain independent, the rule of law will remain independent. Property rights, which I hold sacrosanct, [the] independent enforcement of contracts, it’s [all] going to be there,” he added.