US Warns of ‘Humanitarian Crisis’ if Israel Cuts Off Palestinian Banks

Thu May 23 2024
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STRESA: US Treasury Secretary Janet Yellen warned on Thursday of the risk of a “humanitarian crisis” if Israel cuts off a crucial financing channel to Palestinian banks.

Speaking from Stresa, Italy, ahead of a summit of G7 finance ministers, Yellen underscored the crucial role these banking channels play in facilitating essential transactions worth nearly $8 billion annually in imports from Israel to Palestine. “I’m particularly concerned by Israel’s threats to take action that would lead to Palestinian banks being cut off from their Israeli correspondent banks,” she told reporters.

“These banking channels are critical for processing transactions that enable almost $8 billion a year in imports from Israel, including electricity, water, fuel, and food, as well as facilitating almost $2 billion a year in exports on which Palestinian livelihoods depend,” stated Yellen.

Expressing concern over the economic ramifications, Yellen said that she had corresponded with Israeli Prime Minister Benjamin Netanyahu months prior regarding the economic situation in the occupied West Bank. She emphasized the potential humanitarian fallout should Palestinian banks be cut off from their Israeli counterparts, a move she believes would precipitate a crisis. “And as I said, I believe it would create a humanitarian crisis in due course if Palestinian banks are cut off from Israeli correspondence,” she said.

“Certainly, this is a view that we will voice,” she asserted, hinting at potential discussions at the G7 meeting and expecting other member nations to express similar apprehensions about the impact on the West Bank’s economy.

Yellen also reiterated longstanding US concerns over Israel’s withholding of funds collected for the Palestinian Authority, a practice that she contends “threatens economic stability in the West Bank.” “I expect other countries to express concern about the impact of such a decision on the West Bank economy. “I think this would have a very adverse effect also on Israel.”

The Palestinian Authority exercises limited autonomy in parts of the West Bank under peace agreements brokered in the 1990s, with Israel responsible for collecting funds on its behalf. However, Israel has halted these transfers shortly after October 7, exacerbating economic uncertainty in the region.

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