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Netanyahu said to tell Moody’s further overhaul laws will only pass with consensus

Prime Minister Benjamin Netanyahu met with officials from Moody’s Investors Service, reportedly telling the credit ratings agency that further elements of the judicial overhaul will only pass with broad public support.

The sit-down on Wednesday came ahead of an update to Israel’s sovereign country rating that Moody’s is expected to issue next month and as Netanyahu tries to ease international financial jitters over the judicial overhaul that has coincided with the shekel’s decline relative to the US dollar.

Netanyahu told senior Moody’s representatives that additional legislation will only pass with broad agreement, Channel 12 reported Thursday. However, he made the same assurance to the Biden administration and other international actors before his government went on to pass the first overhaul law in July with a narrow majority of just 64 lawmakers.

Netanyahu this week renewed calls for compromise talks with the opposition, which remains skeptical that the prime minister can be trusted or deliver when his hard-line coalition partners are digging in their heels over the proposed changes.

The Channel 12 report said Netanyahu told the Moody’s representatives that he will soon announce his future plans for the overhaul package. So far, only one element has passed — the so-called reasonableness law that limits the judiciary’s oversight over the Knesset. Petitions against the law are slated to be heard by the High Court of Justice next week, raising concerns over the prospect of a “constitutional crisis” if the legislation is struck down and the government in turn refuses to abide by the ruling.

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Netanyahu reportedly also said during the Wednesday meeting that there will not be a government majority on the judicial selection panel — a key demand of Justice Minister Yariv Levin. The premier predicted mass protests against his government will not stop even if there is a negotiated deal.

Prime Minister Benjamin Netanyahu chairs a cabinet meeting in Jerusalem on August 27, 2023. (Menahem KAHANA / AFP)

Additionally, the prime minister said he was cautiously optimistic about a breakthrough in a normalization deal with Saudi Arabia.

In July, Moody’s warned about “negative consequences” and “significant risk” for Israel’s economy and security situation following the passage of the first bill of the judicial overhaul.

Earlier this year, the agency 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.

Meanwhile on Thursday, the shekel fell to the lowest level in more than three years, as hopes for a judicial overhaul compromise to prevent a constitutional crisis dissipate and amid growing tensions ahead of the high-profile High Court of Justice hearing next week.

The shekel depreciated more than 1% on Thursday to around 3.85 against the US dollar, trading around the weakest since March 2020.