Belgian campaign forces financial group to cancel settlement loans

Press release, Israel colonizes, Dexia finances campaign, 15 June 2009

The Belgian-French financial group Dexia has announced it will no longer finance Israeli settlements in the Occupied Palestinian Territories through its Israeli branch, Dexia Israel. This is the result of a months-long campaign in Belgium, supported by non-governmental organizations, political parties, local authorities, trade unions and other organizations. Dexia's management has stated that financing Israeli settlements is indeed against the bank's code of ethics and thusly, it will stop giving loans for this activity.

In 2001 Dexia Group bought the Israeli bank Otzar Hashilton Hamekomi and renamed the bank Dexia Public Finance Israel. Just like other Dexia subsidiaries, Dexia Israel is specialized in financing municipalities and other local authorities.

It wasn't until October 2008 that a few Belgian solidarity groups discovered that Dexia Israel was not only financing regular Israeli municipalities but was also granting loans to illegal settlements in the Palestinian territories. In a Knesset (Israeli parliament) document, the director of Dexia Israel, David Kapah, confirmed that the bank had indeed granted credits to seven settlements and three regional authorities in the occupied West Bank between 2003 and 2007.

This "smoking gun" evidence entailed the start of a fast-growing campaign in Belgium. United under the slogan "Israel colonizes, Dexia finances," the campaign achieved its first successes. In the following months, petitions were being launched, MPs were questioned and local actions were started up. Significant was the support of local Belgian authorities such as municipalities and provinces, as they hold a vast amount of shares in Dexia Group.

Today, the action platform consists of 61 Belgian organizations and has gathered more than 4,000 signatures and got 29 local authorities to sign a resolution demanding that Dexia break off its relations with the settlements and immediately stop financing the occupation.

"Guilty, but we won't do it again"

For several months the Belgian government and Dexia management didn't respond to the demands of the action platform. However, as the campaign started to receive more media coverage and the pressure started to rise, something changed. On 13 May, campaign activists were able to voice demands at the annual shareholders meeting of Dexia Group in Brussels.

In response, Jean-Luc Dehaene, chairman of the board of Dexia and former Belgian prime minister, admitted that the bank had been extending loans to Israeli colonies. He stressed however that, since September 2008, there has been no additional financing of these or other colonies.

Dehaene declared that no new loans will be granted to the settlements. He added that the credits and loans to the settlements that were granted before are in runoff and will no longer be prolonged; neither will they be replaced by similar loans.

"In the past, Dexia Israel granted 5 million euros of loans to the settlements; this was only one percent of the total budget of Dexia Israel. The loans to the Jerusalem municipality are not included in this amount, as Dexia Group feels that Jerusalem is not contested territory," Dehaene stated.

However, East Jerusalem is considered occupied territory under international law. Israel unilaterally annexed East Jerusalem in June 1967, and extended Israeli law, jurisdiction and administration to this part of the city. In response, the United Nations Security Council adopted Resolution 252 stating that it "Considers that all legislative measures by Israel, including expropriation of land and properties thereon, which tend to change the legal status of Jerusalem ... invalid and cannot change that status."

In 1980 Israel declared Jerusalem the capital of Israel, including East Jerusalem. That same year the UN Security Council adopted Resolution 476, in which the Security Council "Reconfirms that all legislative and administrative measures and actions taken by Israel, the occupying Power, which purport to alter the character and status of Jerusalem have no legal validity and constitute a flagrant violation of the Geneva Convention relative to the Protection of Civilian Persons in Time of War and also constitute a serious obstruction to achieving a comprehensive, just and lasting peace in the Middle East."

Dexia's financial support to the municipality of Jerusalem can be considered support to the colonization of East Jerusalem.

Dehaene also stated that the activities of Dexia Israel no longer belong to the core business of Dexia Group, stating: "Don't be surprised [if] at one point, Dexia Group will sell Dexia Israel."

The campaign has been fruitful already, but this is not the end.

According to Mario Franssen, spokesperson of the action platform, the campaign will continue until Dexia has officially declared -- and provided the proof for -- a full stop of settlement funding, including the disputed loans to Jerusalem. Franssen explains that the action platform is not yet satisfied, but these concessions from Dexia are a good start. "We are still demanding a full and immediate stop of all connections between Dexia and the colonies. Dexia is guilty of financing the occupation, and this has to end," Franssen added.