Palestinian Prime Minister Mohammed Ishtaye on Tuesday warned that the Palestinian Authority (PA) is facing a very acute financial crisis that would prevent it from fulfilling its obligations.
He made the remarks at the start of an emergency meeting of the PA’s cabinet held in the West Bank city of Ramallah to discuss the months-long financial crisis.
Ishtaye discussed the current financial situation with cabinet members and the available means to fulfill its financial obligations by the end of 2021, said an official statement issued after the meeting.
“The financial situation is the most difficult one in so many years,” Ishtaye told the cabinet, adding that “the financial aid that we had received was less than 10 percent of what we used to receive in the past years.”
He noted that “the Palestinian Authority hasn’t received any financial aid from the Arab states for two years.”
Meanwhile, Ishtaye briefed the Palestinian cabinet on his last week’s tour in several European countries and his meeting with donor countries’ representatives in the Norwegian capital Oslo.
“I asked the countries, which are friends with Palestine, to exert pressure on Israel to stop deducting from the Palestinian tax revenues and increase their donations,” he said.
Ishtaye explained to the cabinet that one of the main reasons for the financial crisis is the lack of international and Arab donations to the Palestinians. Another one is the Israeli deduction from the tax revenues.
According to an economic protocol reached between the Palestinians and Israel in 1994, both agreed that the Israel side collects taxes from the Palestinian trade that passes through crossing points it controls and pays it back to the PA treasury.
However, two years ago, Israel began to deduct from tax revenues it pays every month to the PA.
Israel said that the money it deducted was paid by the PA to the Palestinian families whose children were killed in carrying out attacks against Israel, or the Palestinian prisoners in Israeli jails.