Prime Minister Benjamin Netanyahu on Wednesday poo-pooed the notion that investor confidence in Israel is down because of the massive protests over his government’s judicial reform (Israel’s Netanyahu says damage to investor confidence ‘a momentary problem’ as mass protests persist).
“Look, here’s what I think,” Netanyahu told CNBC’s Hadley Gamble. “I think the future as I said belongs to those who innovate. I think the momentary fluff, the momentary dust that is in the air is just that – dust. The fundamentals of the Israeli economy are very powerful.”
CNBC cited the critics of the proposed reform, who warn it would turn Israel into an autocracy by giving the government unlimited powers. Netanyahu suggested the protests were an attempt “to create anarchy” that would cause his government to collapse and bring on new elections. The network also cited the coalition side who say the reform is intended to curb the unlimited powers of the judicial apparatus, which nowadays is involved in every government decision-making.
To illustrate: Finance Minister Bezalel Smotrich the other day lamented the fact that Attorney General Gali Baharav-Miara became involved in his ministry’s plan to largely eliminate Israel’s Standards Institute, which adds needless red tape to the approval process of imported goods, and adhere instead to US and EU standards. According to Smotrich, the AG approved dropping the local standards process for imported products, but not for medicine, because “it’s too dangerous.”
“I’m an attorney, and have never known the possibility of danger to be illegal,” Smotrich said, noting that risk management is what the government is supposed to do, not the judicial apparatus. Nevertheless, the AG not only blocked his plan but also banned him from submitting it to cabinet evaluation. Mind you, the government represents some 2.5 million voters, while Baharav-Miara is a civil servant appointed by the previous Justice Minister.
Gamble pushed the Israeli PM on Moody’s lowering its outlook for his country from “positive” to “stable,” which could mean Israel would have to pay higher rates for its borrowing. She did acknowledge, however, that Moody’s rating of Israel remains at A1, in the upper end of the investment-grade category.
“Here’s what I have found in the past when people said to me the same thing, and I said to them the same thing,” Netanyahu responded. “I said, wait until the dust settles. And what happens right now is this, the smart money moves in because they know that the fundamentals are great, they know that Israel has tremendous R&D, tremendous economic resources, tremendous ingenuity, tremendous innovation.”
The PM added, “I don’t want to say stupid money, [but] the less smart money moves with the herd, moves with this or that report. The smart money comes in, and they will make a lot of money. So, those who come in now, and are coming now, are going to make a lot of money. Those who come in a little later are going to make a little less money.”
