The European Commission has urged Israel to refrain from anyaction that could trigger the collapse of the Palestinian Authority, followingIsrael's instruction to cancel the waiver that allows Palestinian banks tocooperate with the Israeli financial system.
At the European Commission's midday briefing in Brussels,spokesperson Anouar El Anouni said that Israeli Finance Minister BezalelSmotrich's move risks severing Palestinian banks from the Israeli financialsystem, which the Palestinian economy heavily depends on for processing Israelishekel transactions in the West Bank.
El Anouni warned that if the decision is confirmed, it willhave an immediate negative impact on the EU's ongoing support to Palestiniancitizens and the Palestinian Authority's reform agenda, potentially harmingessential public services and regional stability.
"The EU calls on Israel to revert this decisionimmediately and to refrain from any action that could lead to the collapse ofthe Palestinian Authority," he said.
Earlier today, Smotrich ordered the end of legal immunityfor Israeli banks working with Palestinian banks, according to the ministry.
Israeli banks depend on an annual government guarantee toavoid legal prosecution when transacting with Palestinian banks, and this movewould effectively halt these financial operations.
The decision is part of broader Israeli measures aimed atpressuring the Palestinian economy, including withholding tax revenues.
