Israel Risks Hurting Economy If It Rushes Judicial Reform, Summers Says

(Bloomberg) — Former US Treasury Secretary Lawrence Summers said Israel’s government risks damaging the nation’s economy if it rushes to overhaul its judicial system.

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The feeling of a number of people — including many with the capacity to take their money out of the country — is that “an overly rapid, not carefully done, judicial reform could raise serious and profound questions about the rule of law,” Summers told Bloomberg Television’s “Wall Street Week” with David Westin. “And that, it seems to me, could have quite serious adverse effects on the Israeli economy.”

Israeli media recently reported that Prime Minister Benjamin Netanyahu had spoken with Summers in an effort to enlist his support for the government’s plans to revamp the legal system. Summers declined to comment on any talks with government officials, but noted he has been closely following this issue.

The move by Netanyahu’s government to give Israel’s parliament more power over the nation’s top court has triggered street protests, criticism from economists and unnerved local markets. Israel’s top banking supervisor and a member of the central bank’s monetary committee announced their resignations.

Read More: Israel’s Top Central Banker Evokes Economy in Courts Debate

“The temperature has to come down on both sides,” Summers said. “There is a strong case for judicial reform” in Israel, he said. It’s “unusual by international standards for judges to be chosen by currently sitting judges” he said.

He added that “my instinct is that judicial reform is appropriate, but with a very different process, and a slower track, then seems to be envisioned by many in Israel right now.”

“It’s really a very fundamental issue for Israeli democracy,” he said.

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