In a groundbreaking move, the 150 largest companies in Israel have announced their decision to stage a massive strike on Monday in protest against the proposed legislation aimed at limiting the use of the judicial doctrine of reasonableness.
The striking companies have formed a formidable alliance, with the notice of the strike being released shortly after a gathering of the Business Forum.
The impact of this unprecedented strike is set to be felt across various sectors, as shopping centers operated by industry giants like Azrieli, Ofer, and BIG will close their doors in solidarity with the cause.
As well, leading real estate firms including Amot Investments and a glut of representatives from the start-up nation’s hi-tech companies have also pledged their support, allowing their employees to participate in the protests against the proposed reform.
A statement from Azrieli Group chairman Dana Azrieli issued Sunday night announced the leading shopping business’ participation in the strike.
“For the past few weeks, we have been hoping that a solution would be found that would prevent an unprecedented rift within us and lead to a halt to the unilateral legislation, which threatens to harm the social fabric and Israeli democracy. To our deep regret, it seems that all the calls for a stop and negotiations did not achieve their goal,” the statement read, adding that Azrieli Group commerce centers and offices would be shutting down for the day, with the exception of essential services such as groceries and banks.
“We are at a critical stage where each and every one must choose which side of history he wants to be on, and do all he can to signal to our leaders to stop, listen to the cry coming from the people, and reach an agreed solution,” Azrieli concluded.
Brace for economic impact
The Business Forum, acting as the driving force behind the demonstration, has called on other companies to join the strike, urging for a united front against the legislation. Moreover, the Business Forum is pressing for urgent negotiations and mutual agreements to be reached on the crucial matter of judicial reform.
The implications of this united front of major companies in Israel are likely to reverberate throughout the economy. Dr. Miriam Schwartz-Ziv, professor of finance from the Hebrew University of Jerusalem, elaborated on the economic impact that Monday’s corporate protest is likely to have.
“What’s quite unique about the ongoing protests against the judicial reform is that employers are on the frontline encouraging/allowing their employees to participate in the protest during their working hours, and in some cases, even providing their employees with transportation to the demonstrations," she said. "For half a year now, a substantial number of productive citizens are choosing to invest their time and energy in protesting against the judicial reform, and thus, they have less time and energy to invest in working. If employees are protesting instead working, this absolutely weakens the economy."
She went on to explain why corporations and employers are encouraging their employees to protest. “They're doing it because they're concerned that the judicial reform will hurt their business," she said. “For example, following the discussions on the judicial reform, banks have suffered from withdrawals of deposits at a substantial rate, typically by customers who choose to move their deposits abroad; Hi-tech companies are having an increasingly difficult time raising capital as investors prefer to refrain from investing in Israeli companies due to the unrest and uncertainty deriving from the judicial reform.”
Schwartz-Ziv noted that the economic damage is already evident, and offered a comparison of the S&P 500 and its Israeli stock-market equivalent, the Tel Aviv 125 index. “Historically, these indexes have typically moved similarly, but during the last year, you see different trends in each of the stock indexes: the S&P 500 has increased by almost 15%, while the Tel Aviv 125 index is essentially where it was a year ago. Put differently, the Israeli stock market has underperformed by 15% relative to its US counterpart," she said.
"An additional indicator showing how the Israeli economy is weakening is that the international credit rating agencies are once again discussing the possibility of downgrading Israel’s credit rating," she added. "This will have huge and direct costs on the interest rate Israel will have to pay when the country issues bonds."
Schwartz-Ziv highlighted that to have a strong economy, employees, employers, local and international financial institutions, investors, etc. need to have faith in the economy and wish to take part in the Israeli eco-system. The sooner this faith the stored, the quicker the Israeli economy will recover.
Businesses on both sides of the fence
Despite the writing on the wall regarding the reform’s ill effect on the economy, some companies have dug in their heels in protest of those protesting.
On Sunday, chairman of the Movement of Independent Businesses Oren Buta lashed out against the Business Forum’s decision, stating “It is important to note that you do not employ most of the workers in the non-governmental sector, but we, the 550,000 small and medium-sized business owners, among them factories that employ hundreds of workers.”
“By the way, besides you, there are thousands of other large businesses that are not on strike, such as Yochananof and Rami Levy, and they will surely enjoy the fruits of the public's money on the day of your strike, and after it as well,” he said.
The same day, Erel Margalit, founder and chairman of JVP, delivered a speech to over a thousand Israeli and American demonstrators who marched across New York City’s Brooklyn Bridge to protest the Israeli government’s judicial overhaul.
“The battle for Israel’s future is not just the battle of the country of Israel… This is the battle of the entire Jewish people around the world. The Jewish people are the creative nation of the world. Israel was and will forever be the answer to antisemitism and dictatorship,” he said.
“Israel is the place for the Jewish people to express their freedom, and to respect the freedom of others. Israel is a place that was built on values of human rights, the rule of law, the independence of the judicial system, and the constitutional limitations of its politicians,” he continued. “Like every Jerusalemite, I know that extremism and zealousness lead to destruction. This time the destruction is happening within us, and we will not let Netanyahu and his government lead us to the third “Hurban Habait” (destruction of the Jewish temple). We will protect the fabric of our society and the solidarity that has come with it for the last 75 years.”
He concluded by adding that “the alliance between Israel and the US is more important than ever. This alliance needs to stand up, and say clearly – Israel will not become a dictatorship, this needs to stop.”
With tensions running high and public interest piqued, all eyes will be on Monday's strike as it sends a resounding message to the legislative powers about the dire need for meaningful dialogue and consideration on the issue of the judicial doctrine of reasonableness, and the legal system’s reform on a whole.