PM Netanyahu not concerned as Israel downgraded by major credit rating firms

Tel Aviv [Israel], July 25 (ANI/TPS): Major credit rating agencies and financial firms are downgrading Israel’s standing, or issuing new warnings about its economy, in the wake of Monday’s passage of the first part of the government’s controversial judicial reforms. But Prime Minister Netanyahu says he is not too concerned by this.
Credit rating agency Morgan Stanley on Tuesday lowered Israel’s credit rating to “dislike stance,” saying in its report, “We see increased uncertainty about the economic outlook in the coming months and risks becoming skewed to our adverse scenario. Markets are now likely to extrapolate the future policy path and we move Israel sovereign credit to a ‘dislike stance.’”
And Moody’s, which had previously kept Israel’s rating unchanged at “A1,” said that it now sees a “significant risk that political and social tensions over the [judicial reform passage] will continue, with negative consequences for Israel’s economy and security situation.”
In response to these changes, Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich issued a joint statement downplaying the announcements by Moody’s and Morgan Stanley, calling them just a “momentary reaction.”
“When the dust settles,” they said, “it will become clear that Israel’s economy is very strong.”
The two went on to state that Israel’s defence industries are “bursting with orders” and that the country’s gas industry is increasing exports to Europe while seven companies are currently competing for tenders for gas exploration in Israel with an investment of billions.
They also noted that Intel is planning to invest USD 25 billion in Israel and Nvidia is building a supercomputer in the country.
But these moves were announced before the government passed the first stage of its reform plan in the Knesset on Monday and can still be cancelled.
Netanyahu and Smotrich went on to declare, “Israel’s economy is based on solid foundations and will continue to grow under experienced leadership that leads a responsible economic policy.”
On Monday afternoon, all 64 members of Prime Minister Benjamin Netanyahu’s governing coalition voted in favor of a key judicial reform legislation: The amendment to Basic Law: The Judiciary bars “reasonableness” as a justification for judges to reverse decisions made by the Cabinet, ministers and “other elected officials as set by law.”
Supporters of the legal overhaul say they want to end years of judicial overreach while opponents describe the proposals as anti-democratic.
But the opposition says that this was just the first step in taking away the Israel Supreme Court’s power to act as a check on government actions, something they fear will harm Israel’s democracy. This is the type of political instability the rating agencies are worried about. (ANI/TPS)