The Moody’s credit ratings agency downgraded Israel’s economic outlook from “positive” to “stable” on Friday over tensions related to the ongoing political fight over the government’s proposed judicial reforms.
Moody’s retained Israel’s “A1” credit rating, but lowered the country’s economic outlook to the level last reached at the start of the coronavirus pandemic.
Prime Minister Benjamin Netanyahu rejected the revision, Reuters noted:
Israel’s government on Saturday rebuffed an outlook downgrade on the country from credit ratings agency Moody’s, while tens of thousands of Israelis returned to the streets to protest against a planned overhaul of the country’s judiciary.
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“Israel’s economy is stable and solid and with God’s help will remain so,” Netanyahu and his finance minister, Bezalel Smotrich, said in a joint statement.
They said the concerns raised by Moody’s are “natural for those unfamiliar with the strength of Israeli society”.
As Breitbart News has noted in the past, the proposed judicial reforms would bring Israel into line with what is common practice in other democratic countries, including the U.S., where the courts are subject to checks and balances by the other branches of government.
The most controversial proposal, to allow the legislature to override the Supreme Court by a majority vote, has an analogue in the U.S., though the threshold is higher. (Congress can amend the Constitution by a two-thirds vote, ratified by three-fourths of the states. Congress also has the power to eliminate federal courts entirely on a simple majority vote, though it has rarely done so.)
Moody’s outlook change comes despite ongoing talks between the government and the opposition on reaching a compromise. Recent reports suggest that an agreement might emerge in which the courts are held in check in return for an expansion of civil rights guarantees to protect minority groups and Israels secular population.
The government appears to believe that Moody’s is uninformed about the reforms, which have been reported misleadingly in the media, both domestic and foreign. Israel is often the target of media bias; for example, a CNN producer who covers the Middle East was recently found to have anti-Israel protests on social media.
Israeli media are holding the Netanyahu government responsible for the Moody’s downgrade, but it is the opposition that has brought hundreds of thousands of people into the streets and encouraged military reservists to refuse to serve. The opposition has continued its vociferous protests, despite the negotiations. The small Labor Party quit the talks on Sunday, claiming that deals are being done on the reforms behind closed doors.
In 2017, Moody’s agreed to pay nearly $1 billion in penalties to the U.S. government after its inaccurate ratings were said to have contributed to the 2008 global financial crisis. Falsely optimistic ratings about mortgage-backed securities encouraged financial institutions to issue them and invest in them. Those securities lost value as subprime mortgages failed, triggering a financial collapse that launched a devastating global recession.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of the new biography, Rhoda: ‘Comrade Kadalie, You Are Out of Order’. He is also the author of the recent e-book, Neither Free nor Fair: The 2020 U.S. Presidential Election. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.
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