Israel extends key lifeline for Palestinian economy, but only for a month
Add Axios as your preferred source to
see more of our stories on Google.
Bezalel Smotrich, Israel's finance minister, during a news conference in Jerusalem, Israel, on Feb. 5, 2024. Photo: Kobi Wolf/Bloomberg via Getty Images
Israel's ultranationalist finance minister will sign on Thursday an extension authorizing financial correspondence between banks in Israel and the occupied West Bank for one more month only, the minister's spokesperson said.
Why it matters: The U.S. and other Western countries are worried Israel will cut Palestinian banks off from the Israeli financial system and cause an economic collapse in the West Bank that would destabilize the region even further.
- The U.S. and other countries pressed Israel to extend the authorization for another year.
- Israel's finance minister Bezalel Smotrich, an anti-Palestinian settler, has taken many steps over the past two years to weaken the Palestinian Authority as part of his ideology of annexing the West Bank.
Driving the news: The security cabinet approved the one month extension on Thursday, an Israeli official said.
Between the lines: The cabinet decision to extend the authorization for only one more month is connected to the U.S. elections and the desire to re-examine the issue again soon, depending on who wins, an Israeli official said.
- The decision also suggests the Netanyahu government, and Smotrich in particular, may want to use the additional approval in a month as leverage to prevent the Biden administration from taking steps in support of Palestinians at the UN Security Council or from sanctioning more settlers before a new administration assumes office.
What they're saying: The "very short-term" extension creates another looming crisis, "exacerbating uncertainty for international banks, Israeli companies operating in the West Bank, and most importantly for ordinary Palestinians who bear the greatest brunt of such uncertainty," U.S. Secretary of State Antony Blinken and U.S. Treasury Secretary Janet Yellen said in a joint statement on Thursday.
- "Cutting off these banking ties would create significant economic turmoil in the West Bank, threatening the security of Israel and broader region," the statement continued.
- Yellen and Blinken called for Israel to extend the authorization for at least one year and for "future renewals to be transparent, predictable, and de-politicized."
Editor's note: This story has been updated with a statement from Secretary of State Antony Blinken and Treasury Secretary Janet Yellen.
