On Thursday, the security cabinet finally voted to extend for another year the waiver allowing Israeli banks to deal with Palestinian banks – a decision greatly encouraged by the Biden administration and its Western allies who otherwise feared a collapse of the Authority Palestinian Authority (AP), an Israeli official confirmed to Times of Israel.
Over the past two months, Finance Minister Bezalel Smotrich has only agreed to extend the banking deal for one month at a time.
Before the vote, ministers were informed of the opinion of the National Security Council. The latter was in favor of a one-year extension due to possible major repercussions on security and diplomacy, said the Israeli official, confirming information from the Axios news site.
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National Security Minister Itamar Ben Gvir tweeted that he had voted against extending the banking cooperation agreement, lambasting his cabinet colleagues.
Earlier, the United Kingdom, France and Germany issued a joint statement expressing concern that Israel would not extend this intra-bank cooperation agreement.
On October 31, Israel extended this arrangement by just 30 days, which allows Israeli banks to continue carrying out transactions with Palestinian banks.
“This disappointing decision prolongs the uncertainty and endangers the Palestinian economy,” declared the foreign ministers of the three countries.
“Severing these banking ties, which Israel has a clear duty to maintain under the Paris Protocol, would create significant economic unrest in the West Bank, thereby jeopardizing the security of Israel and the entire region,” they had clarified.
“As the November 30 deadline approaches, we therefore renew our call on Israel to immediately extend compensation for at least one year, and for future extensions to be transparent, predictable and depoliticized,” they said. -they concluded.
The Palestinian economy relies heavily on the relationships banks have with their Israeli counterparts to process transactions made in shekels, as the PA does not have its own currency.
According to official data, some 53 billion shekels were exchanged in Palestinian banks in 2023.
The UK, France and Germany assured that the PA had taken “significant steps” to ensure the money did not go to terrorist groups.
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