Israel Joins Paris Club of Rich Creditor Nations

Club is an informal group of 20 countries, including the U.S. that collectively negotiate deals with poor countries struggling with huge debts.

Angela Charlton and Josef Federman
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A Paris Club meeting.
A Paris Club meeting.Credit: Screenshot
Angela Charlton and Josef Federman

PARIS (AP) – Israel was accepted into the Paris Club of creditor nations on Tuesday, in a clear indication of international recognition for its economic accomplishments.

The news that Israel had been accepted into the influential group of rich nations that help poor indebted economies was welcomed by Israeli policy makers, who are facing calls to reduce high levels of poverty and inequality even as the country's economy hums along.

The Paris Club is an informal group of 20 countries, including the United States, that collectively negotiate deals with poor countries struggling with huge debts. It was created in 1956 and has worked out loan deals for 90 countries.

It can cancel or restructure debts when countries are at risk of default. Argentina agreed in May with the Paris Club on a plan to resolve $9.7 billion in debts that have gone unpaid since its economic collapse in 2001-2002.

Finance Minister Yair Lapid lauded the Paris Club announcement, saying it "shows Israel's economic might and presents additional proof that Israel's place is alongside the strongest countries."

"We are like two Israels in one," said Dan Ben-David, executive director of the Taub Center for Social Policy Studies, an independent Jerusalem think tank.

"It is cutting edge by every stretch of the imagination, and fortunately for us, it's leading the country," he said. "The problem is that we have another Israel here, and that other Israel isn't receiving either the tools or the conditions to work in a modern economy. That other Israel is huge and growing."

Israel is also facing a burgeoning movement calling for divestment and sanctions in response to its policies toward the Palestinians. Last weekend, the Presbyterian Church (U.S.A.) voted to sell its stock in three U.S. companies whose products Israel uses in the West Bank.

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