Today’s News
The U.S. warned on Thursday that Israel’s recent one-month extension on banking cooperation with Palestinian banks is too short and risks triggering “another looming crisis” by November 30.
Image Source: Financial Times
The brief extension was announced following a statement from Israeli Finance Minister Bezalel Smotrich’s office, indicating he would sign a waiver to maintain the cooperation for an additional month, as agreed upon by the cabinet.
In a joint statement, U.S. Secretary of State Antony Blinken and Treasury Secretary Janet Yellen emphasized the need for a longer extension, cautioning that the “very short-term duration of this extension creates another looming crisis by Nov. 30, exacerbating uncertainty for international banks, Israeli companies operating in the West Bank, and, most importantly, for ordinary Palestinians.” They advised Israel to extend the waiver by at least a year to avert an economic crisis in the Israeli-occupied West Bank, stressing that Israel’s own security could be at risk.
The waiver enables Israeli banks to process shekel payments tied to Palestinian Authority services and salaries without the threat of facing accusations of money laundering or extremism financing. If this waiver expires without renewal, Palestinian banks would face exclusion from the Israeli financial system.
The economic situation in Palestinian territories is already dire, with the World Bank reporting that Gaza’s GDP dropped by 86% year-on-year in the first quarter of 2024 due to the ongoing conflict with Israel. The latest surge in violence between Israelis and Palestinians erupted on October 7, 2023, after Hamas militants attacked Israel, resulting in 1,200 Israeli fatalities and around 250 hostages, according to Israeli authorities.
In response, Israel’s offensive on Hamas-controlled Gaza has led to over 43,000 fatalities, according to Gaza’s health ministry, while nearly the entire population has been displaced. The humanitarian toll has sparked international concern, with some raising allegations of a humanitarian crisis and genocide, claims that Israel denies.
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