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 on Wednesday 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.
“The fact that there seems to be so much anger and so much alienation on the part of so many with so much capital, raises the prospect of capital flight and exit of many who have built incredible export power houses that, by generating foreign exchange, have strengthened Israeli markets and strengthened the value of the shekel.”
“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,” said Summers.
Asked about the conversation he had with Prime Minister Benjamin Netanyahu regarding the judicial reform, Summers replied, “I will only just say that I think Prime Minister Netanyahu, who is obviously a controversial figure, has over many years had important accomplishments in contributing to Israeli economic reform and I hope that, as he thinks through the many complexities of this issue, he can focus on what entrepreneurial and financial communities inside of Israel and out are saying about the possible risks here.”

On the argument that in the US, the President appoints the judges of the Supreme Court and therefore this can be applied in Israel as well, Summers replied, “I think there”s a major difference, and very frequently in countries with parliamentary systems, there are mechanisms that provide for the appointment of judges separate from the parliament, because that”s the only other government there is and one wants the judiciary to provide balance.”
He continued, “I”m not someone who will ever make the equation of judicial reform equals the destruction of democracy. It”s the nature of this judicial reform that has caused me so much concern.”