'This is not our first war, but it's the first war we've seen Israel's credit rating drop'

Haaretz Podcast

The decision by Moody's credit rating agency to downgrade Israel's rating and outlook last week was a shock to the country after decades of growth and a rosy outlook for the future as its technology-driven industries flourished.

Haaretz economics editor and commentator David Rosenberg explains to Haaretz Podcast host Allison Kaplan Sommer why Israel received this "black mark," what it means, Israel's finance minister's "abnormal reaction" to the news and how it reflects the world's distrust of a far-right Orthodox-dominated government with an "agenda that, whatever else you might think about it, is not positive for the start-up nation phenomenon."

The Gaza war, he suggests, marks the end of "a view that was shared by many people in the Middle East – not just by Israelis – that there was an alternative to war and terrorism and constant political upheaval. That alternative, which we've seen happening in the Gulf, especially in the United Arab Emirates, and to a degree in Saudi Arabia, was 'let's focus on economic development and creating normal middle class societies' while pushing the Palestinian problem and try to put our political troubles behind us."

Also on the podcast, Haaretz's Washington correspondent Ben Samuels outlines the growing tensions between the Biden White House and the Israeli government over a full-on ground invasion in Rafah, where Hamas military presence remains, among 1.3 million Palestinian refugees crammed into the southern Strip.

Will Netanyahu defy the Biden administration's concerns and forge ahead? Samuels says that as long as the White House offers carrots without sticks, he believes it will. "The warnings are falling on deaf ears because Israel understands that there aren't going to be significant consequences other than rhetorical reprimands. Until there's really some sort of conditionality on U.S. support, the warnings of the administration will be relatively ineffective."

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