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<\/a><\/p>\nJERUSALEM (Reuters) -Israel’s government on Saturday rebuffed an outlook downgrade on the country from credit ratings agency Moody’s, while tens of thousands of Israelis returned to the streets to protest against a planned overhaul of the country’s judiciary.<\/p>\n
Moody’s report issued on Friday marks the latest warning about a potential economic backlash to Prime Minister Benjamin Netanyahu’s legislative push.<\/p>\n
The move includes giving politicians greater sway on selecting judges and limiting the power of the Supreme Court to strike down legislation.<\/p>\n
Moody’s affirmed Israel’s sovereign credit rating at “A1”, while revising its outlook to stable from positive.<\/p>\n
“Israel’s economy is stable and solid and with God’s help will remain so,” Netanyahu and his finance minister, Bezalel Smotrich, said in a joint statement.<\/p>\n
They said the concerns raised by Moody’s are “natural for those unfamiliar with the strength of Israeli society”.<\/p>\n
At the same time tens of thousands of Israelis again gathered in Tel Aviv and other cities in intensifying weekly protests, waving flags, banging drums and blaring horns. <\/p>\n
They worry the proposed changes will weaken the courts and endanger civil liberties.<\/p>\n
Moody’s, summing up the months of turmoil since Netanyahu returned to power late last year at the head of a religious-nationalist coalition, said Israeli institutions were less predictable given the government’s handling of events.<\/p>\n
“The wide-ranging nature of the originally proposed changes and the speed with which the government attempted to push them<\/p>\n
through …without an attempt to achieve broad consensus point to a weakening of institutions,” the agency said.<\/p>\n
Netanyahu, under pressure at home and abroad, has agreed to delay the overhaul to try to negotiate a middle ground, but Moody’s, echoing opposition lawmakers in Israel, said: “It is far from clear whether a compromise can be found.”<\/p>\n
On the upside, it said, the country’s positive economic and fiscal trends remain, should a solution be reached.<\/p>\n
Israel’s central bank and senior Finance Ministry officials have warned that the judicial overhaul might impact investor sentiment and hurt the economy.<\/p>\n
Critics, who range from the business elite to former military officers, say the overhaul will hurt democracy and hand uncontrolled powers to the government of the day.<\/p>\n
Netanyahu, who is on trial on graft charges he denies, says the changes are needed to rein in activist judges who have interfered in political decision making.<\/p>\n
Israel’s economy grew a faster-than-expected 6.4% in 2022, although growth is expected to fall below 3% this year amid steep central bank interest rate hikes aimed at battling high inflation.<\/p>\n
(Reporting by Ari Rabinovitch; editing by Jason Neely)<\/p>\n
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