Prof. Moshe Hazan, a senior Bank of Israel official who announced his political retirement following the expected changes in the justice system as a result of incoming minister Yariv Levin’s plan, spoke this morning (Tuesday) with Anat Davidov and Gideon Oko on their program on 103FM and explained why he decided to act this way.
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“Ultimately, the debate here is about the system that encompasses the entire Israeli economy. Every economist understands that the rules of the game are that there is a separation of powers, there is restraint of the executive authority which is the government, in Israel mainly by the legal system, and these are the rules of the game. As soon as this framework is endangered , it is possible that the Israeli economy will suffer terrible shocks. That is why I think it is more important to explain what the economic consequences of the legal reform are,” explained Hazan at the beginning of the interview.
When asked how the governor of the Bank of Israel reacted to his retirement, he replied: “You will have to ask him that. I have known Amir Yaron long before I came to the bank, before he came, from our academic background. In the end, everyone makes their own choices. He thanked me for my service. He didn’t try to sway me from my decision. I don’t think he was surprised. We know each other personally and there are things burning and he knew it was me.”
As for the ‘straw that broke the camel’s back’, Hazan answered: “In the end, in the membership of the committee, the rule is even if it is not written – that we are supposed to be state-like. I cannot sit quietly and be state-like. The feeling is that this reform could bring disasters here. In the end, there is some sort of social agreement between the state and the citizens, and the state needs to start thinking of citizens as customers, if they are not feeling well, they can get up and walk away. And those who can get up and walk away are the ones who contribute more to the public purse, and if they start getting up and walking away, the situation here will simply be a catastrophe “, valid.
In conclusion, he concluded: “I’m not a lawyer, so I don’t know if it’s impossible to make such and such changes, I do know how to say unequivocally that the economic literature shows that when the reins are allowed and the supervision of the executive authority is not tight – countries degenerate into corruption, investors reduce their investment And the standard of living of the residents drops significantly. If we want to become a banana republic, please, this is the way. If we want to keep Israel a democratic country, with a developed economy that relies very significantly on the world economy through innovation and sophisticated industry, then we need to ensure that all these investors have A court that enforces laws, there are those who protect their property rights.”
Assisted in the preparation of the article: Shani Romano 103FM