The Israeli planned judicial renovation could pose a threat to weaken its institutional strength, according to Moody’s rating agency.

The “proposed judicial overhaul could lead to weaker checks and balances with negative implications for the country’s institutions and governance strength,” the rating agency says, warning: “If implemented in full, the proposed changes could materially weaken the strength of the judiciary and as such be credit negative,” 

It can pose "longer-term risks for Israel’s economic prospects, particularly capital inflows into the important high-tech sector... The scale of the changes and the speed with which the government attempts to push them through parliament have led to widespread criticism from civil society groups, opposition politicians, and the international community. Israel has seen continued large-scale protests since January 2023."

Political divisions in "Israel" between the government and the opposition are escalating in light of the exchange of accusations of responsibility for the possible outbreak of an "internal war", as "Israel" is witnessing demonstrations by thousands of settlers against the government of Benjamin Netanyahu.

ההפגנה בתל אביב, נכון לשעה 20:00. צילום: תומר אפלבאום @tomerappelbaum @Haaretz pic.twitter.com/go8buEB9HB

— Noa Landau נעה לנדאו (@noa_landau) February 18, 2023

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This comes shortly after leaders within the Israeli occupation spoke about the ongoing division in "Israel" exposed by the results of the latest legislative elections.

"It remains to be seen whether the proposed changes will be implemented in their current form or whether some sort of compromise will be reached.”

No escape from the 'negative impact' 

Government officials, per a Channel 12 report, have been discussing with Moody’s in an attempt to persuade it that the judicial overhaul does not have a negative impact on the economy or institutional system.

Fitch Ratings gave last week "Israel" an A+ credit rating alongside a stable outlook, due to its “diversified, resilient” economy, but just like Moody's prediction, it suggested that the planned judicial changes pose a “negative impact” - adding that it could cause worse outcomes or "sustained negative investor sentiment.”

The proposed changes to the judicial system are being led by Justice Minister Yariv Levin and prioritized by the occupation's PM Benjamin Netanyahu’s hard-right coalition.

The proposed legal overhaul would grant the government total control over the appointment of judges, including High Court justices, and severely limit the High Court’s ability to strike down legislation — concentrating almost all governing authority in the hands of the political majority.

Illustrating the increasingly stark division between Israelis, the president of Israeli occupation’s Supreme Court Esther Hayut last month, lashed out at the "judicial reform plan", stressing that it “would crush the justice system.”