G7 finance leaders to call on Israel to keep ties with Palestinian banks

Finance ministers and central bank governors pose for the family picture at the G7 Finance Ministers meeting in Stresa, Italy, on May 24, 2024. (Gabriel Bouys/AFP)
Finance ministers and central bank governors pose for the family picture at the G7 Finance Ministers meeting in Stresa, Italy, on May 24, 2024. (Gabriel Bouys/AFP)

STRESA, Italy — G7 finance leaders will call on Israel to maintain correspondent banking links between Israeli and Palestinian banks to allow vital transactions, trade and services to continue, according to a draft joint statement seen by Reuters.

The statement, to be released at the end of a Group of Seven finance ministers and central bank governors’ meeting in northern Italy, also calls for Israel “to release withheld clearance revenues to the Palestinian Authority, in view of its urgent fiscal needs.”

The statement echoes a warning on Thursday from US Treasury Secretary Janet Yellen, who said the failure to renew a soon-to-expire banking waiver would cut off a critical lifeline for the Palestinian territories amid a devastating conflict in Gaza.

“We call on Israel to take the necessary measures to ensure that correspondent banking services between Israeli and Palestinian banks remain in place, so that vital financial transactions and critical trade and services continue,” the draft statement says.

The G7 finance leaders will also call for the removal or relaxation of other measures “that have negatively impacted commerce to avoid further exacerbating the economic situation in the West Bank.”

Far-right Finance Minister Belazel Smotrich has indicated that Israel may not renew a waiver that expires on July 1 that allows Israeli banks to process shekel payments for services and salaries tied to the Palestinian Authority, in response to the PA’s efforts for international recognition of a state and for what he said was its bid to obtain international arrest warrants against Israelis over the war in Gaza.

Times of Israel staff contributed to this report.

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