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Ministers also call on Israel to release Palestinian tax revenues it is holding back.
May 25. (EUROPA PRESS) –
The ministers of Economy, Finance and the governors of the central banks of the G7 have asked Israel this Saturday to do everything possible to guarantee the operation of Palestinian banks and transactions with Israeli financial entities to try to mitigate the impact of the war of Gaza, especially in the West Bank.
“Maintaining economic stability in the West Bank is also fundamental for regional security,” ministers and governors requested at the end of their meeting in the Italian city of Stresa. The Palestinian economy runs on the Israeli shekel and its financial transactions with the rest of the world must go through Israel’s banking system.
“We urge Israel to take the necessary measures to ensure that the corresponding banking services between Israeli and Palestinian banks continue to function, so that vital financial transactions as well as trade and critical services continue,” they added.
It should be remembered that Israel’s Finance Minister, the ultra Belazel Smotrich, has warned that they have no intention of extending an exemption that expires on July 1 and that allows Israeli banks to process payments in shekels for services and salaries linked to the Palestinian Authority.
“The financial system of the Palestinian Authority is infected up to its neck with terrorism,” declared Smotrich.
US Treasury Secretary Janet Yellen stressed that these banking channels are critical to processing transactions that allow almost 8 billion euros a year in imports from Israel, including electricity, water, fuel and food, in addition to facilitating almost 2 billion euros a year in exports on which Palestinian livelihoods depend. Likewise, those attending the Stresa meeting warn that, given the “humanitarian and economic risks posed by a regional escalation” of the conflict in Gaza, and that it has even extended to international maritime transport, with the attacks by the Houthi insurgency in Yemen against cargo ships sailing through the Red Sea, it is also necessary for Israel to “release the withheld liquidation revenue to the Palestinian Authority.”
Since the peace agreements of the 1990s, Israel has also collected tax revenue on behalf of the Palestinians and transferred the funds to the Palestinian Authority. A large portion of these funds is used to pay salaries.
Since January 24, 2024, monthly tax revenue previously allocated to Palestinian Authority public sector employees in Gaza has been transferred to a trust account based in Norway. However, the Norwegian fund cannot release the money to pay public sector employees in Gaza without Israel’s permission.
The ministers, who also condemn “in the strongest terms” the massacre committed by the Palestinian militias in Israel on October 7, which triggered the current conflict in Gaza, generally ask the Israeli authorities to “eliminate or relax other measures that have negatively impacted trade to avoid further exacerbating the economic situation in the West Bank.
“We will continue to cooperate to provide vital humanitarian assistance to Palestinians in need and provide support to civilians and economies in the region that are negatively affected by the conflict and its collateral effects,” the ministers and governors conclude.
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