“Immense and irreversible damage”: Economists warn Netanyahu over sanctions remarks
A letter signed by more than 100 economists, business leaders and former officials warns that banking sanctions could paralyze Israeli businesses, drive away investment and undermine the country’s ability to finance its security. The signatories call Netanyahu’s proposed alternative economy baffling.
More than 100 economists, including two Nobel laureates, alongside business leaders and former public officials, have signed a strongly worded letter warning that banking sanctions against Israel would cause “immense and irreversible damage.”
The letter follows remarks made by Prime Minister Benjamin Netanyahu on Friday, when he suggested that Israel should “develop an alternative economic infrastructure” in anticipation of potential banking sanctions, citing blockchain as one possible option. The signatories express “deep anxiety and concern” over his comments, describing preparations to use cryptocurrencies as an alternative as “baffling” and noting that such methods are typically associated with criminal organizations.
The signatories include Prof. Joel Mokyr, the 2025 Nobel laureate in Economics, and Prof. Aaron Ciechanover, a Nobel laureate in Chemistry; Prof. Jacob Frenkel, a former Governor of the Bank of Israel; and four former Directors General of the Ministry of Finance: Yarom Ariav, Prof. Avi Ben-Bassat, David Brodet, and Haim Shani. They also include three former Deputy Governors of the Bank of Israel, Prof. Zvi Eckstein, Prof. Avia Spivak, and Dr. Nadine Baudot-Trajtenberg, as well as two former Supervisors of Banks, Yair Avidan and Roni Hizkiyahu. Former Budget Directors David Boaz and Prof. Udi Nissan have also signed the letter.
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Yair Avidan (from right), Nadine Baudot-Trajtenberg and Gigi Levy-Weiss.
(Photos: Barak Avidan, Avigail Uzi, Orel Cohen)
Other signatories include Prof. David Harel, President of the Israel Academy of Sciences and Humanities, and prominent figures from the high-tech and venture capital industries, including Marius Nacht, co-founder of Check Point; Alon Cohen, co-founder of CyberArk; Dov Moran; and Gigi Levy-Weiss.
The signatories warn that banking sanctions would paralyze the Israeli economy. “The Israeli banking system, corporations, exporters, and investors, foremost among them the high-tech sector, the economy’s engine of growth, would be unable to function,” the letter states. “Unemployment would skyrocket, foreign investment would vanish entirely, and Israel’s economic standing on the global stage would collapse.”
The letter also describes the potential consequences for ordinary Israelis. “Israelis would be unable to use credit cards; international e-commerce sites (such as Amazon and AliExpress) would become inaccessible to customers in Israel; and foreign workers would leave the country en masse, as they would no longer be able to send funds to their families. The healthcare system would be unable to procure medical equipment or medications.”
“Economic sanctions would completely destroy the model that enables Israel to exist as a modern, advanced economy,” the letter states. Citing South Africa, Iran, and Russia as examples of countries that have faced similar sanctions, the signatories warn that “the standard of living for Israeli citizens will plummet, and the state’s ability to fund its security and defend itself against its enemies will be severely compromised.”
The letter’s final section addresses Netanyahu directly. “Netanyahu is knowingly leading the State of Israel toward a boycott and international economic isolation,” the signatories write, arguing that the prime minister has offered only “a bizarre solution, the kind seen in criminal organizations, which will be of no help whatsoever.” His remarks, they add, “reveal a fundamental lack of understanding and sheer ignorance regarding the collapse of Israel’s standing in the international arena.”
The letter describes an extreme scenario involving comprehensive banking sanctions, which no one is currently proposing. The measures imposed or announced to date are more targeted, with many related to Israeli settlements.
In September, the United Kingdom announced a ban on imports from the settlements, alongside sanctions against companies and individuals, including financial institutions, that facilitate their expansion. That same month, a ban on trading in goods from the settlements took effect in the Netherlands, where deliberate violations can carry prison sentences of up to six years.
Seven Israeli banks are listed in the UN Human Rights Council’s database of companies involved in settlement-related activities, which was updated in September. The Jewish People Policy Institute has identified 121 restrictive measures against Israel across 62 countries, 40 of them financial in nature.
The new letter follows an appeal issued last week by a forum of economists, signed by more than 60 economists and former senior officials, warning of the risks of international isolation and sanctions. The latest letter broadens the group of signatories to include senior figures from high-tech companies, venture capital funds, and leading law firms, many of whose businesses would be directly exposed to any disruption in Israel’s access to the international financial system.
