Belgian bank financing Israeli settlements

David Cronin, The Electronic Intifada, 13 April 2010

BRUSSELS (IPS) – Dexia, a major Belgian-French bank, is continuing to finance Israeli authorities in the Occupied Palestinian Territories (OPT) almost a year after it indicated that it would cease providing loans to illegal settlements.

In May 2009, Dexia promised that it would not lend any fresh money to councils representing Israeli settlers in the occupied West Bank.

Although Palestinian solidarity activists regarded the announcement as a victory for a campaign they had fought against Dexia, they are not satisfied that all the bank’s transactions with Israeli settlements have been halted.

Intal, a human rights group in Brussels, says it will protest at Dexia’s annual shareholders’ meeting next month, because many of the earlier loans issued to Israeli settlements run until 2017 and are unaffected by last year’s pledge.

“We are calling on Dexia to cut all ties with the occupation [of Palestine],” Intal spokesman Mario Franssen told IPS. “How they do that is up to them. We’re not asking for a boycott of Israel in this case but probably the only solution is for them to get out.”

Dexia’s involvement with Israeli settlements first came to the knowledge of campaign groups in Europe during October 2008, the same month that the governments of Belgium, France and Luxembourg agreed to a multi-billion euro rescue package to prevent the bank from collapsing. In statements to the Israeli parliament — known as the Knesset — Dexia had acknowledged arranging loans to seven settlements and three Israeli-controlled regional bodies in the occupied West Bank between 2003 and 2007.

Intal is also incensed by remarks made by former Belgian Prime Minister Jean-Luc Dehaene, now a Dexia chairman, during 2009. While Dehaene confessed that Dexia had provided loans worth 5 million euros ($6.7 million) to settlements in the occupied West Bank, he stressed that loans to Jerusalem were not included in that amount because “Dexia Group feels that Jerusalem is not contested territory.”

Dehaene’s statements are at odds with several resolutions from the United Nations. The UN refused to recognize both Israel’s annexation of East Jerusalem in 1967 and its 1980 declaration that Jerusalem is the capital of Israel. Following the 1980 declaration, the UN’s Security Council insisted that all legislative and administrative measures taken by Israel to alter the status of Jerusalem would be invalid.

According to Intal’s calculations, the combined value of Dexia’s loans to Jerusalem and to settlements elsewhere in the West Bank exceeds 15 million euros.

Dehaene, also a member of the European Parliament, did not respond to requests for comment. Shir Hever, an economist with the Alternative Information Center, a joint Israel-Palestinian organization, said that Dehaene’s efforts to draw a distinction between settlement activities in East Jerusalem and the wider West Bank amount to a “clear violation of European law. This is even more to the right than the United States, which refuses to make that distinction.”

Dexia is refusing to divulge the precise nature of its relationship with Israeli settlements. During 2009 Dexia won a public contract to finance a large number of Israeli authorities. When the initial call for tenders was made in Israel, some 80 authorities were covered by it, including five based in settlements that are illegal under international law. By the time the contract was awarded to Dexia, the number of authorities concerned had been reduced to 54.

Despite giving assurances that bodies working in Israeli settlements were ineligible for financing, Dexia has refused to publish a list of the 54 authorities.

Contacted by IPS, a Dexia spokeswoman would not answer questions about the bank’s policies in occupied East Jerusalem. The spokeswoman would only say that Dexia had acquired the Israeli financial institution Otzar Hashilton Hamekomi in 2001 and subsequently renamed it Dexia Israel. “This bank operates on the entire Israeli territory and finances Jewish and Arab municipalities indiscriminately,” the spokeswoman said.

In a message to Dexia shareholders last year, Dehaene tried to downplay the significance of the bank’s lending in Israel and the OPT, indicating that the Middle East was not a priority region. “Don’t be surprised if at one point Dexia Group will sell Dexia Israel,” he said.

Since then a plan to restructure Dexia has been approved by the European Commission, which had conducted an investigation into whether public aid to the bank complied with Europe’s competition rules. The restructuring plan requires the bank to concentrate on its core markets of Belgium, France and Luxembourg and end many of its activities in Spain, Italy, Slovakia and Turkey. Dexia Israel, though, is not covered by the plan.

“Israel is not really the core market for Dexia,” said Intal’s Mario Franssen. “But Dexia Israel has never been mentioned [in the restructuring plan], probably because Dexia is making money there. One way or another, it appears to be profiting from the occupation.”

All rights reserved, IPS — Inter Press Service (2010). Total or partial publication, retransmission or sale forbidden.

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