Bank of Israel (Photo Credit: Reuters)
In the wake of the Israeli government’s judicial overhaul, Israeli companies and investors recently withdrew $2.2 billion from national mutual funds to invest abroad, according to a report from The Times of Israel, published on 5 March.
The report also indicates that in recent months, the Tel Aviv Stock Exchange declined by 10 to 15 percent compared to stock exchanges in EU nations and the US, as the value of the Israeli shekel depreciates against the US dollar and Euro.
The frequency of withdrawals increased due to warnings from bank officials and economists predicting that national companies will face financial consequences once the government’s plans to limit Tel Aviv’s judiciary are ratified.
Last month, around $400 million of the $2.2 billion was transferred into investment funds outside of the country, five times more than in previous months.
In recent weeks, Israel faced nationwide demonstrations over its government’s judiciary reforms. This controversial legislation grants Israeli Prime Minister Benjamin Netanyahu and his coalition government the power to limit Israel’s national judiciary, as they can replace court judges with others more aligned with the government’s rhetoric.
Israel’s Knesset held its first reading of the controversial bill to reform the Israeli judiciary on 21 February. Sixty-three voted in favor of the bill, and 47 voted against it, with no abstentions. Three readings are required for the bill to be approved.
A month prior, Israeli cybersecurity corporation Wiz, valued at $6 billion, revealed its plan to withdraw tens of millions of dollars from national banks after receiving pressure from investors over the judicial changes.
Not only are Israeli companies seeking to move their capital abroad, but there has also been a drastic increase in Israelis seeking to obtain foreign passports, according to a report released by Israeli Channel 12.
The report indicates that the number of Israelis seeking European citizenship has increased significantly since the 1 November elections in 2022. Israelis applying for French passports increased by 13 percent, Portuguese by 68 percent, and Polish and German passports by 10 percent over the last two months.