Amichai Eliyahu

I had good reason to criticize the Bank of Israel governor

Prof. Yaron is welcome, and even obligated, to make tough statements about government policy – just not on CNN
Bank of Israel Governor Amir Yaron speaks in an interview with CNN aired March 15, 2023. (Screenshot: CNN; used in accordance with Clause 27a of the Copyright Law)
Bank of Israel Governor Amir Yaron speaks in an interview with CNN aired March 15, 2023. (Screenshot: CNN; used in accordance with Clause 27a of the Copyright Law)

The harsh statements I recently made against the Governor of the Bank of Israel have gotten some publicity in the United States, and friends, old and new, have contacted me asking to understand why I made the comments. Let me briefly explain my position, in particular, why I drew a connection between the governor’s behavior and the aspirations of my government to reform the judicial system.

In a March 14th interview with CNN, Bank of Israel Governor Amir Yaron referred to the independence of the judiciary, saying, “the changes [introduced] in the judicial reform could weaken some of this independence.” He added that “the process itself is hasty and does not have a wide agreement in the public,”

I believe the governor has a duty to offer his unvarnished opinion, no matter how harsh – but only if he does so in an appropriate forum. CNN is not such a forum.

In speaking out in English against the judicial reform in Israel, Prof. Yaron harms the Israeli economy. He is interfering in political matters that are not related to his position. By involving himself in political debates, he runs the risk of damaging the Bank of Israel’s credibility and independence.

Yaron’s comments have been widely criticized as inappropriate and beyond the scope of his role as governor. Many economists and politicians are calling on him to focus solely on his responsibilities as governor and to refrain from commenting on issues that fall outside his area of expertise.

It is the duty of the Bank of Israel governor to create stability. Someone who cares about the country’s economy should be pointing out that the economy is strong and resilient, as it is now becoming clear that, contrary to his dire predictions, the state of the economy is favorable.

Today, we can see that his ominous warnings have proven to be untrue. The enormous investment in Israel by US semiconductor giant Intel Corp., as reported in recent days, proves this, as does the fact that the shekel’s exchange rate against the dollar has lately been rising quite consistently.

When the person entrusted by the country to maintain its economy tells the world that the struggle for judicial reform undermines economic resilience, he himself may create a crisis with his own words. When he expresses “concern,” he himself undermines the situation.

Yaron’s claim in the CNN interview that the reform does not have broad public consensus went well beyond the scope of what a Bank of Israel governor should say to a global audience – these are the words of an economic commentator, and it is not his role to interpret the political situation. He was not authorized to do so, and when he does, he violates his duty.

There is no doubt that in closed-door consultations, he can and must express his professional opinion. And if his council is not heeded, his only options are to act in accordance with his defined role definition or to resign.

About the Author
Rabbi Amichai Eliyahu is Israel's Minister of Heritage and a member of the Otzma Yehudit party.