US Treasury Secretary Janet Yellen and finance ministers from seven allied nations have sent a warning letter to Israeli Prime Minister Benjamin Netanyahu about the potential collapse of the Palestinian economy. The letter expresses concern that the actions of Israel's far-right finance minister, Bezalel Smotrich, could jeopardize the stability of the Palestinian banking system. They highlighted that the expiration of a financial correspondence agreement between Israeli and Palestinian banks could lead to severe repercussions, including the fall of the Palestinian Authority and increased security risks for Israel.
The letter, signed by finance ministers from Japan, Canada, the EU, the UK, the Netherlands, Australia, and France, emphasizes the need for continued banking relations to facilitate vital financial transactions and trade. It also calls for the release of suspended tax revenues to the Palestinian Authority and the reinstatement of work permits for Palestinian workers, contingent on security conditions.
The Israeli government has yet to respond to the letter, and discussions regarding the matter are expected during an upcoming Israeli security cabinet meeting.
