Moody’s after overhaul law: Israel faces negative economic fallout, significant risk

Credit rating agency Moody’s Investors Service on Tuesday warned about “negative consequences” and “significant risk” for Israel’s economy and security situation following the passage of the first bill of the government’s contested judicial overhaul.

Back in April, Moody’s lowered Israel’s credit outlook from “positive” to “stable,” citing a “deterioration of Israel’s governance” and upheaval over the government’s bid to dramatically overhaul the judiciary.

“More specifically, we believe the wide-ranging nature of the government’s proposals could materially weaken the judiciary’s independence and disrupt effective checks and balances between the various branches of government, which are important aspects of strong institutions,” Moody’s wrote in the issuer comment it released late on Tuesday. “Israel has no written constitution and its institutional set-up relies to an important extent on judicial oversight and review.” READ MORE