The Standard and Poor's 500 stock market index (S&P) on Thursday warned that the controversy over the Israeli government's judicial reform plan would continue to endanger Israel's economy, but did not change its credit rating – days after the Jewish state's parliament passed one of the main reform bills to abolish the reasonableness standard.
More stories:
In a statement, the rating agency said the "controversy over judicial reforms will continue to harm the Israeli economy."
2 View gallery
Finance Minister Bezalel Smotrich and Prime Minister Benjamin Netanyahu
(Photo: REUTERS/Amir Cohen)
"The controversial legal reform could aggravate internal conflicts in Israel and cloud economic growth in the medium term. We believe that internal political polarization will remain heightened in the coming months. It is currently unclear what the chances of other parties adopting the legal reform are," S&P added.
Upon the passing of the bill, renewed mass protests were sparked over the government’s progression of its controversial judicial overhaul. The Tel Aviv 35 Index also plunged by 5.2 percent over the past week, prompting Moody’s Investors Service to caution that the situation was “raising the risk of a constitutional crisis between the executive and judiciary.”
The Finance Ministry reportedly said it was "blindsided" by the S&P warning, unlike the scheduled Moody's report, which Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich responded to with confidence.
“This is a momentary response. When the dust clears, it will be clear that the Israeli economy is very strong. The security industries are bursting with orders. The gas industry is increasing exports to Europe, and seven companies are now competing for tenders to explore for gas in Israel at an investment worth billions,” they assured.