Smotrich Extends Cooperation with Palestinian Banks Amid US Pressure
Israeli Finance Minister Bezalel Smotrich has agreed to extend cooperation with Palestinian banks for an additional month, following significant pressure from US Treasury Secretary Janet Yellen and other international leaders. This decision aims to prevent further deterioration of the Palestinian economy, which is crucial for maintaining stability in the West Bank, governed by the Palestinian Authority.
The extension will allow Israeli banks to continue accepting shekel payments from the Palestinian Authority, thereby facilitating essential financial transactions necessary for the economy of the West Bank and Gaza. Smotrich had previously threatened to cease this cooperation, which raised alarms about potential economic collapse in the region.
In a letter dated October 25, Yellen and finance ministers from major countries, including Japan, Canada, and members of the European Union, warned Israeli Prime Minister Benjamin Netanyahu that failing to extend this cooperation could lead to a banking crisis in the West Bank. The ministers expressed concerns that such a collapse could destabilize the Palestinian Authority and escalate security issues for Israel.
The letter emphasized the need for continued relations between Israeli and Palestinian banks to ensure that vital financial transactions, trade, and essential services remain operational. It also called for the release of suspended tax revenues to the Palestinian Authority and the reinstatement of work permits for Palestinian workers where security conditions allow.
Smotrich, known for his far-right stance, previously imposed demands on Palestinian banks to prevent illegal financing related to families of Palestinian prisoners and martyrs. However, recent assessments from the Biden administration indicated that Palestinian banks had fulfilled the conditions set by Smotrich for continued cooperation.
