The Israeli newspaper Ma’ariv (Hebrew) has a splashing headline today warning that Israeli banks are preparing for a “political-economic tsunami” due to the possibility of an impending European boycott. Unsurprisingly, the banks – Israel’s largest – have been holding meetings amongst themselves to prepare for this tsunami, albeit “quietly and under the radar”.

According to Ma’ariv there is “increasing evidence in recent weeks” that the European Union is considering recommendations published in a policy paper last month by the European Council on Foreign Relations (ECFR). Heavily reported at the time (our coverage here), ECFR’s policy paper warned that transactions between European states and Israeli financial institutions are obligated to adhere to EU policies based on international law when providing loans and financing to Israeli businesses, institutions and individuals in transaction with the illegal Israeli settlements enterprise.

An unnamed senior banking official told Ma’ariv, “Beneath the surface this is a mega-event” and if this should happen the economic implications on the banks will have a “massive” impact on the Israeli economy.

This is same tsunami we’ve been hearing about for years now. The timing of the article is somewhat intriguing given there was no information provided indicating what this “increasing evidence” is. But there was this rather curious tickler (google translate):

Further deterioration in relations between Israel and the United States downplays the chances that the Americans will try to curb this European action. Maybe the opposite is true. According to various diplomatic sources, the Americans have actually released the reins on Europe and are encouraging Europe to intensify its operations against the continuation of Israel’s settlement policy in the territories.

Do tell. One wonders if an increase in pressure might be in relation to Israeli influence over looming U.S. congressional legislation seeking to tank the P5+1 deal with Iran over their nuclear program.

Quoting officials in the Israeli banking system, this is a national issue; there are no banks in Israel not involved in the settlements and there’s “no trick that can solve this affair”:

“Credit marking” means that each Israeli bank which provides mortgage for the purchasing of an Apartment in Maale Adumim, Ariel, certain Places in Modi’in etc. enters the blacklist. The Europeans include also Jerusalem, Ariel, Golan heights, road 443 and parts of road 1 under the term “conquered territory”. There is not a bank in Israel that is not involved in activities in these areas. Every credit given to a business, every mortgage, can mean the bank risks a European boycott. “It has an enormous implication”, a senior in the banking system says, “the meaning of this is a siege upon the Israeli economy, a kind of SHUT DOWN. In such a situation we will have to organise and refer to the PM. Solutions for such an issue can only come in the national arena. It’s already far more than a just a financial issue per se. The assessment is, that soon the banking system will exit the bunker and attempt to form an organised policy vis-a-vis the government. In such a situation, it is expected that heads of the banks will meet with the Finance Minister and PM and discuss a “credit and financial safety net for the banks against the new danger”. It is doubtful whether the government is able to produce such a safety net. “We must admit that this is a national issue, we too are aware that there is no trick that can solve this affair”, they say in the banking system, “but this does not lessen our concern. We are speaking about a mega-event which we must prepare towards and digest. This is what we are currently trying to do”.

Tick tock. Tick tock.

Thanks to Ofer Neiman

English translation of Ma’ariv’s article, provided by Jonathan Ofir