Israel urged by Yellen to help Palestinian economy function
Subscribe to enjoy similar stories. Treasury Secretary Janet Yellen warned that the West Bank’s economy could collapse if Israel doesn’t preserve its banking relationship with Palestinian financial institutions in the territory it occupies, highlighting another potential source of instability as Israel also fights foes in Gaza, Lebanon and Iran. In a letter to Prime Minister Benjamin Netanyahu, Yellen and several of her global counterparts urged the Israeli leader’s government to approve a waiver that would continue to allow Palestinian and Israeli banks to correspond.
Without the waiver, the Palestinian banks would be cut off from Israel’s financial system, severing a relationship that supports $13.2 billion in trade, according to the letter. Israeli Finance Minister Bezalel Smotrich has until Oct. 31 to sign off on renewing the waiver, which must be done periodically.
Failing to renew the banking relationship risks disrupting the disbursement of millions of dollars of international donor support, according to the letter, which was reviewed by The Wall Street Journal. Smotrich, an ultranationalist hard-liner and settler leader, and his far-right allies oppose and have sought to weaken the U.S.-backed Palestinian Authority, which governs parts of the West Bank and cooperates on security issues with Israel. Spokespeople for Smotrich and the Israeli prime minister’s office didn’t immediately respond to requests for comment.
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