Israel: Protests against Judicial Reforms continue for 23rd week

Protests against the current government's plans to implement the judicial reforms continued throughout the country for the 23rd week in a row on Saturday evening with demonstrators raising a 200 square meter sign that stated: Type of citizen: dead in response to the 100th person killed this year as a result of crime in Arab areas in Israel.

Demonstrations were held in Dizengoff Square and Kaplan Street in Tel Aviv, as well as in Haifa. 

Speakers at Kaplan Street, the main demonstration with the largest number of participants, included Dr. Thabat Abu Ras, co-CEO of the Abraham Initiatives Association, who criticized the current government on their handling of murders and crime in Arab society.

Many roads in Tel Aviv were closed to traffic due to the protests.

"This week is important and critical. We'll have to make sure that the practice of electing an opposition member and a coalition member is preserved," the organizers of the demonstrations said, referring to the composition of the committee that will select judges once the reforms are implemented. 

Approximately 80,000 people demonstrated in Kaplan Street, according to Ynet, while a report from Walla (citing the protest organizers) states that 100,000 people protested against the judicial reform overall in Tel Aviv.

More than one thousand people demonstrated in Jerusalem in front of the President's house, Ynet reported.

At the beginning of the demonstration, protestors observed a moment of silence in memory of the 100 Arab Israeli victims this year.

At the Nahalal junction, near Highway 73, demonstrators lit 100 candles in memory of the 100 victims of violence in Arab society since the beginning of the year.

About 3,500 people participated in the demonstration.

 

Moody’s downgrades Israel’s credit rating

Global rating agency Moody's on Friday affirmed its sovereign credit rating at ‘A1 but downgraded the outlook on the Israeli government's credit ratings to ‘stable’, from ‘positive’.

In a statement, Moody's explained that the affirmation of the ‘A1’ rating reflects Israel's strong economic growth and improving fiscal strength which Moody's expects to continue in its baseline scenario. The economy has proven resilient to many economic and geopolitical shocks over the past decades and has grown at a rapid clip, helped by Israel's globally competitive high-tech industries.

Moody's concerns

Regarding the decision to downgrade the outlook, Moody's wrote that the change of outlook to stable from positive reflects a deterioration of Israel's governance, as illustrated by the recent events around the government's proposal for overhauling the country's judiciary... The manner in which the government has attempted to implement a wide-ranging reform without seeking broad consensus points to a weakening of institutional strength and policy predictability. As a result, the risks on Israel's rating are now balanced, leading to a stable outlook.

"All in all, the recent events offset the positive developments that had led Moody's to assign a positive outlook in April 2022, which related to strong economic and fiscal performance and the implementation of structural reforms by the previous government," the statement continued.

The agency had upgraded Israel's outlook to 'positive' in April 2022, explaining then that the key drivers for the change in outlook included the government's reform agenda that aimed to address longer-term challenges and the agency's expectation of a further reduction in the government's debt ratio.

Netanyahu and Herzog spoke with Moody's

Prime Minister Benjamin Netanyahu and President Isaac Herzog spoke to officials at Moody’s on Friday before the publication of the rating, in order to sway them not to downgrade the rating.

Israel's current rating ‘A1’ is an upper-medium score. This indicates that Israel is capable of repaying short-term loans.

Moody had previously warned the government of economic impacts on its proposed legislative policies and many economists echoed these concerns.

In March, Moody said the reform, if implemented in full, could materially weaken the strength of the judiciary and be credit negative. The planned changes could also pose longer-term risks for Israel’s economic prospects, particularly capital inflows into the important high-tech sector.

Fitch, another credit assessor, previously chose to maintain Israel’s A+ credit rating in March, but with a caveat of its own, “Fitch believes the reform could hurt Israel’s credit profile by weakening governance indicators or if the weakening of institutional checks leads to worse policy outcomes or sustained negative investor sentiment.”