The Federal Reserve Bank
The Federal Reserve BankiStock

Former US Federal Reserve chairman Ben Bernanke, who won the Nobel Prize in economics last year, warned in a conversation with Channel 13 News that the judicial reform being promoted by the government will harm the Israeli economy.

"Israel is a small and open economy that depends on international trade and international investments for economic growth and prosperity. There will be tremendous damage to the security of foreign investors, trading partners, and Israeli entrepreneurs as a result of sudden institutional changes that will increase uncertainty, create new legal and political risks, and jeopardize the rights of minorities,” Bernanke was quoted as having told Channel 13 News, which only provided a Hebrew translation of the comments rather than the original English.

"In order to ensure that Israel's extraordinary economic success continues, Israel needs to move slowly and build a broad consensus regarding any significant change in its legal system or form of government," he added.

Former US Treasury Secretary Lawrence Summers, whom Prime Minister Benjamin Netanyahu sought to harness to support the judicial reform, warned in an interview with Channel 12 News this past week of possible economic damages that could be caused by the plan.

“There is a sense that, this judicial reform, not because the idea of judicial reform is being pursued, but because it is being pursued in a so divisive and so rapid and so extreme way, that it will undercut confidence in ordinary commercial relations, and what has been a great accomplishment of Israel building a ‘Start-Up economy’ will be undermined,” he said.

“My sense is that Israel is, in a sense, walking too close to a ledge in the way this is being done, and by the time you’re sure that you’re too close to that ledge, it’s too late to repair the situation,” added Summers.

On Thursday, more than a dozen Jewish House Democrats called on the Israeli government to suspend its plans to pass the judicial reform.

The House lawmakers sent a letter to Prime Minister Benjamin Netanyahu, President Isaac Herzog and opposition leader Yair Lapid in an extraordinary expression of concern by US government officials over a foreign, domestic political matter.

The House letter, led by Reps. Brad Schneider (D-IL) and Jerrold Nadler (D-NY) and signed by 14 other Jewish Democrats, call for “compromise” on a judicial “overhaul” that they say “could fundamentally alter the democratic character of the State of Israel.”

The Democrats have been vocal about their opposition to the judicial reform. On the other side, Senate Minority Leader Mitch McConnell (R-KY) told Axios in a recent interview that the Israeli government’s judicial reform is an internal Israeli matter and the US should not intervene.

"This is something the citizens of Israel are going to have to sort out for themselves without any American influence. … It isn’t any of my business to give Israelis advice about how to sort this out," he added.