Some of Israel's leading businesses have joined national strike action and warned of serious consequences for the country's economy after controversial reforms to the country's judicial system were approved in parliament. 

The Israel Business Forum, a federation of 150 top employers, has backed strike action over the planned changes to Israel's 'Basic Law.’ The group has warned that "dramatic damage to the economy" could follow. 

Boycott 

The vote was passed by a margin of 64 votes to zero, when opposition lawmakers held a boycott, walking out of the chamber amid angry scenes.  

Thousands of protesters outside the Knesset in Jerusalem shouted "shame" as the bill was approved by members of the coalition government, which is dominated by right-wing and ultra-nationalist parties.

As well as giving lawmakers the ability to override Supreme Court decisions with a simple majority vote in parliament, the changes give the ruling party sweeping new powers to appoint top judges. Opponents say minority rights and civil liberties are now at risk.

Strike action

Across Israel, businesses closed for the day, including supermarkets, shopping malls and motorway service stations. Israel's burgeoning tech sector has also warned that the country's reputation as a start-up incubator is at risk.

Leaders of Israel's biggest trade union Histadrut said they would consult members over a possible broader strike action if changes to labor law are made without a consensus. Union head Arnon Bar-David warned that "from this moment on. …things will progress with broad agreement or they will not progress at all".

Check on power  

Conservatives in Prime Minister Benjamin Netanyahu's fragile coalition say the changes are a necessary check on the power of the judiciary. Many were angered by a Supreme Court ruling in January to disqualify a top minister from public office, after his conviction for tax fraud. Netenyhau described the indictment as "an unfortunate decision (that) ignores the people's will." 

In a statement Washington appeared to condemn Monday's vote, saying it had been passed with "the slimmest possible majority." 

The stock exchange inTel Aviv fell on the news with banking and blue chip stocks bearing the brunt.

Analysts say there could be consequences for wider fiscal policy in Israel. The shekel has fallen by 10 percent to the dollar since January, when the judicial changes were first proposed. 

Minutes from the recent meeting of the Bank of Israel, which has put rate rises on hold, show the cost of borrowing could be reviewed if the currency comes under more pressure.

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