As countries around the world recognize a Palestinian state, Israel is
doing everything it can to prevent the possibility of any future state.
One way it plans on doing that is through financial strangulation.
Following the wave of global recognitions of the State of Palestine from key Western and European nations, Israel
has been stepping up its plans to render these gestures moot by
implementing measures meant to cripple and delegitimize the Palestinian
Authority (PA).
Earlier this month, Israel approved a massive settlement plan that would split the West Bank in two. Since October 7, 2023, it has plunged the PA into an economic crisis
by withholding nearly 7 billion shekels (around $2 billion) in
Palestinian customs money. And in recent months, the Israeli army has
launched repeated invasions into the heart of Palestinian cities in the West Bank, ostensibly under PA control.
But Israel still hasn't used its most important trump card in responding to the recent Western and global recognitions of a Palestinian state. It involves a piece of paper, and the person holding it is Israel's hardline Finance Minister, Bezalel Smotrich.
Every year, the Finance Minister renews an indemnity
letter allowing Israeli banks to accept money transfers from
Palestinians in the West Bank, shielding Israeli banks from anti-terrorism laws they might be at risk of breaking
by dealing with Palestinian banks. Smotrich has repeatedly threatened
to revoke this letter in response to global sanctions against hardline
Ministers like himself and Itamar Ben-Gvir, which could cause the
collapse of the Palestinian banking sector — and possibly, the
Palestinian Authority. Smotrich has recently been periodically renewing the letter in four-month stretches, using the intervals as pressure points to threaten the PA.
This
is the spearhead of Israel's campaign of economic warfare against
Palestinians in the West Bank. Here's why it could hasten the collapse
of the PA and formally bring about a one-state apartheid reality.
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