Dexia Israel stops financing Israeli settlements

Martijn Lauwens | ‘Israel colonises, Dexia finances’ Campaign

12 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 NGO’s, political parties, local authorities, trade unions and other
organisations. Dexia’s management states that financing Israeli settlements is indeed against the bank’s code of ethics and it will stop giving loans due to this.

A Belgian bank financing Israeli settlements

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

It takes until October 2008 for a few Belgian solidarity groups to discover that Dexia Israel is not only financing regular Israeli municipalities but is also granting loans to illegal settlements in the Palestinian territories. In a document of the Knesset (Israeli Parliament), the director of Dexia Israel, Mr. David Kapah, confirms that the bank has indeed granted credits to seven settlements and
three regional authorities in the occupied Westbank between 2003 and 2007.

This ‘smoking gun’ evidence entails the start of a fast growing campaign in Belgium. United under the slogan ‘Israel colonises, Dexia finances’, the campaign knows its first successes. In the following months petitions are being launched, MP’s are being questioned and local actions are being started up. Very important is 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 organisations, gathered over 4000 signatures and got 29 local authorities to sign a resolution. They all demand that Dexia breaks off its relations with the settlements and stops financing the occupation immediately.

Dexia: ‘Guilty, but we won’t do it again’

For several months the Belgian government and the Dexia management never really responded to the demands of the action platform. However as the campaign started to get more media coverage and the pressure started to rise, something changed. On May 13, the activists of the campaign 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 has been extending loans to Israeli colonies. He stresses however that, since September 2008, there has been no additional financing of these or other colonies.

Dehaene declared no new loans will be granted to the settlements. He added that the credits and loans to the settlements which are granted before are in runoff and will not be prolonged any longer; neither will they be replaced by similar loans.

Dehaene: “In the past, Dexia Israel granted 5 million Euros of loans to the settlements, this was only 1% 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.”
However, East Jerusalem belongs to Palestine. Israel unilaterally annexed East Jerusalem in June 1967, and extended Israeli law, jurisdiction, and administration to this part of the city. In response the Security Council adopted resolution 252 that it “[UN Security Council] Considers that all legislative measures by Israel, including expropriation of land and properties thereon, which tend to change the
legal status of Jerusalem are invalid and cannot change that status”. In 1980 Israel declared Jerusalem the capital of Israel, including East Jerusalem. The same year the UN Security Council adopts resolution 476 that 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 as support to the colonization of East Jerusalem.

Dehaene also states that the activities of Dexia Israel do not belong to the core-business of Dexia Group anymore, adding: “Don’t be surprised that 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.
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