London - Ma'an - Western officials warned of an "economic catastrophe" in the West Bank if the occupation does not renew "a vital exemption that Israeli banks need in order to maintain their relations with their Palestinian counterparts." The British newspaper "Financial Times" reported that this exemption, which expires on July 1, "allows the payment of the costs of vital services and salaries associated with the Palestinian Authority, and facilitates the import of basic materials," such as food, water, and electricity, into the occupied Palestinian territories. Without this exemption, Israeli banks will stop dealing with Palestinian financial institutions, and the Palestinian economy will effectively stop over time, according to three Western officials. The newspaper quoted an American official as saying that not renewing the exemption 'will not only be at the expense of Palestinian interests, but also at the expense of the security and stability of Israel and the region.' It also quoted two other Weste rn officials as saying that Washington is leading the efforts aimed at renewing the exemption, as it 'appealed to its allies to exert pressure on the Israeli government.' British officials said the United Kingdom was 'also concerned' about this issue, according to the Financial Times. This issue is expected to be discussed at the G7 finance ministers' meeting, expected later this week in Italy, according to officials. The newspaper explained that the Palestinian economy trades with other economies in multiple currencies, including the Jordanian dinar, which is widely used in the West Bank. The Palestinian economy operates with the Israeli shekel, so Palestinian financial institutions must pass through the Bank of Israel and other Israeli banks in order to access it. Source: Maan News Agency