Israeli politicians are close to a compromise over a revamp of the legal system, President Isaac Herzog said, suggesting a tamer version of government-backed plans that have rattled markets and sparked large-scale protests.
(Bloomberg) —
Israeli politicians are close to a compromise over a revamp of the legal system, President Isaac Herzog said, suggesting a tamer version of government-backed plans that have rattled markets and sparked large-scale protests.
The shekel rose as much as 2%, the most in almost four months. It was the world’s best performer among a group of 31 major currencies followed by Bloomberg. The Tel Aviv Stock Exchange’s benchmark TA-35 index also rose as much as 1.6%.
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“We are closer than ever to the possibility of an agreed outline,” Herzog said on Monday. Speaking to local council leaders, he called on them to help influence the national leadership to reach an agreement. “There are agreements behind the scenes on most things. They make sense and they are reasonable,” he said.
The original government proposals include transferring the final say on the appointment of new judges to lawmakers as well as giving parliament the power to overrule high court decisions.
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Proponents say the changes are needed to balance out the three branches of government, arguing that the supreme court has become overly activist. They also argue that the makeup of the court doesn’t reflect Israeli society.
Tens of thousands of Israelis have been protesting the proposals that have deepened a divide between traditional, more religious Jews who mainly back the change and the secular professionals who see it as a threat to the Middle East’s most developed economy and democracy.
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The effects have also been felt in markets. Last week, as the plans inched forward, the cost of insuring Israeli debt against default rose to the highest since 2019 for five-year credit-default swaps.
The government and opposition now need to rise to “the magnitude of the moment,” Herzog said and avoid the “terrible alternative” facing the country. Policymakers old and new have warned that the country is close to an even deeper internal rift that could spill over in violence.
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