Dutch pension giant PGGM’s Israel bank divestments spark diplomatic row

Dutch pension fund manager PGGM’s decision this week to divest five Israel-based banks over their role in financing settlements in the disputed West Bank has sparked a diplomatic incident.

PGGM, which has €153bn under management for five pension schemes, announced on Wednesday (January 8) that it had exited Bank Hapoalim, Bank Leumi, Bank Mizrahi-Tefahot, the First International Bank of Israel and Israel Discount Bank.

The move came after what the investor termed a prolonged dialogue with the banks about their involvement with the settlements.

In reaction, the Israeli government today (January 10) summoned Dutch ambassador Caspar Veldkamp to“clarify” the decision – in an echo of a similar row in 2009 when Norway’s giant Government Fund exited Israeli defence firm Elbit Systems for its role in West Bank surveillance systems.
A statement from Israel’s Ministry of Foreign Affairs cited by the JTA news agency called PGGM’s decision “unacceptable and relies on false pretences”. It added that Israel expected the Netherlands “to take an unequivocal stance against such steps, which only wreak damage to the relations”.
Earlier, on January 9, Dutch Foreign Minister Frans Timmermans said that while the Netherlands opposes boycotting Israel, its policy is to discourage domestic firms from conducting business with Israeli settlements.