The proposed Judicial overhaul will make it easier to do business in Israel, not harder, Prime Minister Benjamin Netanyahu told dozens of senior business people as he attempted to sway them not to relocate their corporations to other companies.
"Lifting the bureaucratic-judicial boot will jumpstart the Israeli economy like a spring, by somewhere between 1-2% of the GDP," he said.
He spoke to the business community after two companies — Papaya Global and Disruptive Technologies Venture Capital — said they planned to pull out of Israel due to their concern regarding the negative financial impacts of the judicial reform.
"The independence of the court will be preserved in a system of checks and balances that exist in all countries. The reform won't harm the economy, it will boost it."Prime Minister Benjamin Netanyahu
In combatting what has become a growing economic concern, Netanyahu has pulled on his historic role as the former Finance Minister in transforming Israel's economy from one based on social welfare to a free-market model closed to two decades ago.
Part of that drive included de-regularization to remove bureaucratic barriers that had hampered the economy.
Both at a press conference on Wednesday night and again with the business community on Friday morning he attempted to draw a parallel between his successful economic reform and the judicial overhaul his new government proposed.
He explained Israel's judiciary similarly suffers from excessive regulation.
"The problem of judicialization in Israel is a huge obstacle to the economy. The Israeli economic miracle is not due to judicialization but in spite of Israeli judicialization which is one of the worst in the western world," Netanyahu said.
The World Bank, he explained, had given Israel a global 75th ranking when it came to contract enforcement because a court can overturn it on the grounds that it is unreasonable, a possibility that does not exist in most democracies.
Israel's economic success story is not because of "judicialization," but in spite of it, Netanyahu said.
"Everyone who invests in Israel says this and there are thousands of investors who did not come to Israel precisely because of this," he explained.
"You know how much judicialization hinders your business. Therefore, the judicial reform will only help the Israeli economy and businesses," Netanyahu said.
He pointed to the delays in the development of the natural gas fields as an example of judicial overreach regarding a project slated to pour billions into the country's economy.
"I personally went to the Supreme Court and fought for the removal of the gas," Netanyahu said.
At present, the Israel court system has unbridled power and as a result, the legal process in Israel takes twice as long as in other countries, Netanyahu said.
He dismissed charges that the reform would judicial independence by making the judiciary subservient to the legislature.
"The independence of the court will be preserved in a system of checks and balances that exist in all countries. The reform won't harm the economy, it will boost it," he said.
The S&P credit-rating agency earlier this week warned that a judicial overhaul could downgrade Israel’s rating. Leading Israel financial experts such as Prof. Karnit Flug, former Bank of Israel governor had issued similar statements.