Open

Coming up

Don't miss

Replay


LATEST SHOWS

IN THE PAPERS

Coverage of the third plane crash in one week - from France, Algeria and Burkina Faso

Read more

IN THE PAPERS

Coverage of the plane crash that took 116 lives - almost half of them French

Read more

DEBATE

Gaza: A Truce At All Costs?

Read more

AFRICA NEWS

Central African Republic: Brazzaville ceasefire talks deliver fragile deal

Read more

FOCUS

Sluggish tourist season in Crimea

Read more

ENCORE!

Bartabas : Mixing Christ with Spanish music and dancing horses

Read more

IN THE PAPERS

Shifts in the propaganda war waged between Israelis and Palestinians

Read more

IN THE PAPERS

French MPs face quandary in pro-Palestinian rallies

Read more

THE INTERVIEW

Yezid Sayigh, Senior Associate at the Carnegie Middle East Center in Beirut

Read more

  • Live: ‘No survivors’ from Algerian plane crash, says Hollande

    Read more

  • Protest against Gaza offensive turns deadly in West Bank

    Read more

  • Wreckage of Algeria plane found in Mali

    Read more

  • Deadly strike on UN shelter in Gaza Strip

    Read more

  • BNP to pay $80 million for defrauding Dept of Agriculture

    Read more

  • Pope meets Christian woman sentenced to death in Sudan

    Read more

  • Air Algérie crash: 'We should eliminate the missile hypothesis'

    Read more

  • Italy’s Nibali cruises to victory in 18th stage of Tour de France

    Read more

  • Iraqi parliament elects moderate Kurd as president

    Read more

  • US, European agencies lift travel restrictions to Tel Aviv

    Read more

  • No end to fighting until Israel ends Gaza blockade, Hamas says

    Read more

  • Two foreign women shot dead in western Afghanistan

    Read more

  • At least 60 killed in attack on prison convoy near Baghdad

    Read more

Gaza cash crunch could lead to bank collapse

Latest update : 2008-12-07

On Saturday the World Bank said that Israel's blockade of Gaza had created cash shortages that could collapse its banks. A day earlier, the banks had shut down due to lack of funds.

 

REUTERS - The World Bank said on Saturday that Israel's tightened blockade of the Hamas-run Gaza Strip had created cash shortages that could lead to the collapse of banks in the impoverished Palestinian territory.

 

Also sounding an alarm, the International Monetary Fund (IMF) said the spiralling Gazan crisis risked bolstering Palestinian militants who have alternative supplies of cash and contraband thanks to smuggling tunnels from neighbouring Egypt.

 

Banks across Gaza have been shut since Thursday because they don't have enough money to operate. Israel cut off imports of cash and other goods this month as cross-border violence rose.

 

"The liquidity crisis could lead to the collapse of the commercial banking system in Gaza," the World Bank said in a statement, warning also that this could entail "serious humanitarian implications" for 1.5 million Palestinians there.

 

Israel was urged "to move swiftly to restore cash liquidity in Gaza bank branches" before the three-day Muslim Eid al-Adha feast that begins on Monday.

 

Israel allowed dozens of truckloads of food and medical supplies into Gaza on Thursday, but it was unclear when it would let cash into the coastal enclave to replenish currency stocks.

 

Palestinian Prime Minister Salam Fayyad, whose Western-backed government is based in the Israeli-occupied West Bank, said this week that there was not enough cash in Gaza to cover salaries for more than 77,000 government workers.

 

Fayyad said 250 million Israeli shekels ($63 million) was needed to pay these salaries but Gaza's banks had only 47 million shekels.

 

Israel tightened its blockade of Gaza a year ago after Hamas wrested the territory from secular Fatah forces loyal to President Mahmoud Abbas, who favours peace talks with Israel.

 

The closure was stepped up after a raid by Israeli forces on Nov. 4 triggered a surge in rocket attacks by Gazan militants.

 

Cash-strapped Palestinian civil servants could prove easy recruits for militants groups, the IMF said in a statement:

 

"The inability of employees and aid beneficiaries to draw their salaries and aid payments, raises the risk that, over time, these groups would turn to employment opportunities and benefits provided by those with easier access to cash from other sources (such as through the tunnels between Gaza and Egypt)."

 

An Israeli military spokesman said at least 15 rockets and mortar bombs have been fired from Gaza at Israel since Thursday, but there were no casualties. An Israeli defence official said the Gaza closure would remain in place on Sunday.

 

Faris Hadad-Zervos, an aide to Middle East peace envoy Tony Blair, voiced understanding for Israel's security concerns but said the Gaza closure appeared to be backfiring by helping "black-market imports and operations in the strip, whose profitability has increased as a result of the closures".

Date created : 2008-12-07

COMMENT(S)