“If fully implemented, the proposed changes could materially weaken the judiciary’s power, and thus be negative for credit,” the foundation said in a statement.
In addition, he stressed that it could also pose long-term risks to the economic outlook, particularly capital flows into the important high-tech sector.
Six days ago, several economists again criticized the executive’s proposal, pointing out that its negative effects will materialize more forcefully and more quickly than expected.
In a new open letter, following the one published at the end of January, experts claim that damages from the bill are still piling up.
They stressed that even if markets stabilize in the short term, there will be dire consequences in the long term for the country’s economic growth and the quality of life of citizens.
“Unfortunately, our warnings went unheeded and the Coalition (in power) continued the legislative initiative while blatantly ignoring the country’s and the world’s warnings about the expected damage to the economy,” they wrote.
More than 300 experts, including January’s Nobel laureate Eric Maskin, warned: “Judicial system reform threatens the Israeli economy and may cause a downgrade in Israel’s credit rating, drive investors away and cause a brain drain.”
According to the draft put forward by Justice Minister Yariv Levin, the initiative would limit the Supreme Court’s ability to reject laws due to a so-called nullification clause, which would allow parliament to re-enact regulations challenged by that body.
It also gives the executive branch complete control over the selection of judges, prevents the court from using the test of reasonableness to judge legislation and government decisions, and allows ministers to appoint their own legal advisers.
In February, more than 50 leading economists from US universities, including 11 Nobel laureates, criticized the plan in another public letter.
A few days ago, a survey by Business Data Israel, a business information provider, revealed that 20 percent of companies are considering or have already done withdrawing their funds from the country for fear of the consequences of the regulations.
Specifically, at the end of January during a meeting with Prime Minister Benjamin Netanyahu, several businessmen warned him that this would happen.
Capital flight has already begun, Bank Hapoalim CEO Dov Kotler said at the time during the meeting, “It’s not a dramatic scale yet, but we’re concerned that this is the beginning of a trend.”
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