Israeli banks could be hit: Major concern over European sanctions

There is concern at the Manufacturers Association of Israel over sanctions that European countries, led by Britain, intend to impose on Israeli industrial entities operating beyond the Green Line and on companies maintaining business ties with them.

Against this backdrop, Manufacturers Association President Avraham Novogrocki turned to the relevant government ministries, including the Foreign, Economy, and Finance ministries, to examine ways to assist in dealing with the new situation. The volume of industrial exports is estimated at NIS 175 billion, most of it in the high-tech sector.

The share of exports among companies active beyond the Green Line stands at 5% of total exports, totaling about NIS 9 billion. This includes plastics plants, machining, food, and more. These plants employ about 18,000 Palestinian workers in Judea and Samaria, who could be indirectly hurt by the sanctions.

Another substantial sector is agricultural produce, such as vegetables and dates, which is considered in high demand in European markets. In the past, farmers in the West Bank attempted to conceal the origin of the produce by marketing through third parties. However, there is a fear that the sanctions will harm not only industrial companies operating beyond the Green Line, but also entities maintaining business ties with them. This includes financial institutions, led by banks and insurance companies.

At the Bank of Israel, no meeting has taken place at this stage regarding the implications of the boycott on the financial system. According to the Manufacturers Association president, "The economic sanctions did not start today, but long ago, but now it is a step up. We are in continuous contact with various government ministries, but at this stage no action has been taken, except for diplomatic steps by the Foreign Ministry."

In response to a question about what solutions are on the table, Novogrocki clarified: "We must act on several tracks, and first and foremost separate the economic issue from the political one and not mix the two. The state must ease regulation and various barriers that make exporting difficult. There are other ways to assist Israeli companies in selling in Europe, even to countries boycotting Israel. Strengthening industry will allow us to be competitive abroad, and then it will be very difficult for the Europeans to ignore us.

"I do not see how an English consumer stops using Waze, medical equipment machines, or laptops, which originate from indirect exports from the territories. We must act as soon as possible, before the boycott steps gain momentum."