Shekel Gains and Shares Rise in Anticipation of Judicial Overhaul Pause3 min read
On Monday, the shekel recorded gains against the US dollar and a rise was seen in Israel shares, as a general strike was declared by the union of the national federation of workers.
This was done to increase pressure on Prime Minister Benjamin Netanyahu to hit pause on the controversial legislation for overhauling the judiciary.
There was a more than 1% rise in the local currency to 3.55 against the US dollar in intraday trading, after it had dropped earlier this month to a four-month low.
This was because lawmakers were pushing forward with legislation that would give the government control over judicial appointments and revoke the ability of the High Court to review Basic Laws.
There was a 1.8% gain recorded in the benchmark TA-125 index of the Tel Aviv Stock Exchange and a 2% rise was also seen in the TA-35 index of blue-chip firms.
A 1.4% rise was seen in the Tel Aviv Index of the five biggest banks and a jump of 3.5% was recorded in the TA Insurance and Financial Services.
Prime Minister Benjamin Netanyahu was scheduled to announce a delay in overhaul legislation later on Monday.
The chief of the Histadrut labor federation, Arnon Bar-David, announced that the biggest union in the country was going on strike.
He said that it would go into effect from Monday onwards in order to push the government into putting a stop to the judicial overhaul.
After the announcement, departures from Ben Gurion Airport were immediately halted. After the general strike declaration, tech firms, businesses, local authorities and shopping malls began shutting down.
One of the largest banks in the country, Bank Hapoalim and Israel Discount Bank, also announced that they were shutting down their branches in light of the strike.
The latter also urged lawmakers to halt the legislative process related to the controversial overhaul proposals.
Startup founders, tech entrepreneurs and workers are some of the groups that have been protesting against the overhaul because they believe it will weaken the system of checks and balances and harm democracy.
The tech sector is also concerned that the judicial overhaul will make people leery of investing in the country and this would see a rise in capital outflow.
Their fears are not unfounded because a number of companies have already announced that they are withdrawing their funds from Israel.
Start-Up Nation Central, also posted on Twitter that it was joining the strike and said that the startup nation was now in danger.
The post said that they were hoping to resume operations for the benefit of the country’s democracy and its economy.
The head of the Association of Contractors and Builders and Manufacturers Association of Israel, on the other hand, announced that they would not join the strike.
The two organizations said in a joint statement that strike would only cause harm and it was not a solution because it would widen the rift.
While the direct economic cost cannot be accurately estimated, a full strike is likely to lead to damages worth billions of shekels.