The credit rating company S&P published a special report on Israel's economy in which it states that the changes in the Israeli legal system endanger the country's economy.
The agency complimented the strong Israeli economy, but warned against the consequences of the changes promoted by the government in the legal system: "In the short term, we anticipate that the political uncertainty, together with weak economic performance by Israel's allies in Europe and the United States, will reduce economic growth in Israel in the next two years."
Earlier this week, the credit rating agency Moody's published a report on Israel in which it was stated that "the risk of a constitutional crisis is increasing, and the data are worrying."
"The comprehensive nature of the government's plans may significantly weaken the independence of the judicial system and disrupt the effective checks and balances between the various authorities. Some of our earlier concerns regarding the effects of the reform on Israel's economy are beginning to materialize. There are signs that Israel is disconnecting from global trends in the technology industry," the document says.
Finance Minister Bezalel Smotrich responded, "When you look beyond the headlines in the media, you see that S&P, like Moody's, does not recommend lowering the credit rating and does not warn of damage to the economy due to the legal reform, but because of the protest that creates instability. Meanwhile, Moshe Radman, one of the leaders of the protest, also openly declares their intention to damage the economy. The opposition must condemn elements like him who are harming the State of Israel, and reach a real dialogue in order to lead to joint agreements and together to fix the essential things in the legal system and strengthen the Israeli economy."
Kan reported that senior officials of the Ministry of Finance told Minister Bezalel Smotrich during a closed discussion that they do not have the tools to improve the trust of the rating agencies in the Israeli economy because of the government's actions.
According to the report, the meeting dealt with the demand to act to increase the confidence of the international economic factors in the Israeli economy.
Senior officials of the ministry said that it is not possible to improve Israel's economic image. This is because the agencies' announcements do not deal with the exclusively economic data, but strongly criticize the conduct of the government, the reform it is promoting and the fact that it acts in an unpredictable manner.
For his part, the Minister of Finance said that he believes that the state of Israel's economy is good. In a statement issued on behalf of the ministry, it was stated: "The Ministry of Finance takes the situation seriously. We are in close contact with the rating companies and international economic bodies, and frequently examine the state of the economy and the risks it faces, among other things in the light of th
ese bodies."