Netanyahu tells Dermer to ask finance orgs Israeli legal reform impact

According to a tweet from Channel 12 News economics correspondent Amalya Duek, Prime Minister Netanyahu has asked Strategic Affairs Minister Ron Dermer to meet with finance organizations — presumably in order to smooth over the projected negative effect that the government’s planned judicial reform will have on Israel’s economy.

פרסום ראשון - בצעד חריג, נתניהו ביקש מרון דרמר מקורבו להיות זה שיקיים שיחות עם בתי ההשקעות וסוכנויות הדירוג בעניין הרפורמה המשפטית. בשגרה, מי שמנהלים את השיחות הם אנשי האוצר ולא דרג פוליטי.

— עמליה דואק (@AmalyaDuek) February 4, 2023

“In an unusual move, Netanyahu asked his associate Ron Dermer to be the one to hold talks with the investment houses and the rating agencies regarding the legal reform,” Duek wrote, adding that “Normally, the people who manage [such] talks are Finance Ministry people and not the political echelon.”

On Friday, American finance organization JPMorgan issued a report specifying the risk posed by investment in Israel in light of the judicial reform and increased geopolitical tension within the country.

What are the reports saying?

According to reports from the Kan public broadcaster, Netanyahu personally contacted senior leaders within the firm in an effort to prevent the report’s release. Earlier in the week, the PM had suggested that JPMorgan’s lack of concern regarding the judicial reforms was evidence that they would not tank Israel’s reputation among investors.

Per Kan’s report, Netanyahu also spoke with several international credit ratings firms in order to downplay the expected negative impact that experts have stated the legal overhaul will have.

On Saturday, former Bank of Israel chief and recent JPMorgan Chase International chairperson Jacob Frenkel criticized Netanyahu’s negligence in heeding the concerns of experts and economic leaders who have repeatedly expressed how damaging the judicial reforms could be to Israel’s economy, particularly in relation to its reputation among foreign investors.

“I’m very surprised,” he told Channel 12 news. “When JPMorgan makes a recommendation — take it very seriously… Countries that have weakened their judicial oversight are the countries where the citizens have suffered.”

“This is not the time for panic. This is the time to demand that the [warning] opinions be heeded. This is not how you carry out a reform,” Frenkel added. “Netanyahu and I carried out a reform of Israel’s foreign currency market. It was done gradually, with fieldwork, transparency and a process. Not deep, fast, now! What is this?”