Rachel Reeves has put her signature to a letter sent to Benjamin Netanyahu warning that one of his far-right ministers is close to causing the collapse of the banking system in the West Bank.
The UK chancellor is one of eight signatories of a letter, who also include Treasury Secretary Janet Yellen, who are urging the Israeli PM to “take steps to decrease the risk of the economic collapse of the West Bank by extending the correspondent banking relationship by at least one year.”
The American news site Axios obtained a copy of the letter sent to the Israeli PM, which notes that far-right minister Finance Minister Bezalel Smotrich has until October 31 to approve a banking extension.
It is understood that Reeves shares the concerns of her counterparts that Smotrich could fail to sign an extension leading to the potential collapse of the Palestinian Authority.
Minister of Finance Bezalel Smotrich and and Arnon Ben Dor, Chairman of the Histadrut hold a joint press conference in Tel Aviv, March 2, 2023. (Avshalom Sassoni/Flash90)
Alongside counterparts from Japan, Canada, the US, the EU, the Netherlands, Australia, and France, chancellor Reeves signs a letter stating:”We write to emphasize our fear that actions taken by some members of your government to deny the West Bank access to financial resources endangers Israel’s security and threatens to further destabilize the entire region in an already perilous moment.”
The signatories warn that if the authorisation isn’t extended, more than $13 billion in trade ties between Israeli and Palestinian banks would be threatened, and the already dire situation in the West Bank would be made worse.
They say donor funds needed to stabilise the Palestinian economy could also be disrupted.In order for the Smotrich to be overruled the Israeli cabinet, meeting on Sunday, would need to intervene.
Smotrich is believed to have made a series of demands from the PA to prevent money from the banks being channelled into terroism.
Axios reports that the Biden administration has been working to ensure these demands are met.
Reeves will this week deliver her first budget as chancellor in the Commons.
