The Palestinian Authority will be able to pay partial June salaries to more than 43,000 civil servants, thanks in part to a €23 million ($27 million) grant announced Monday by the European Union.
The PA had announced on Sunday that it would only be able to pay some wages to its civil servants, whose wages constitute around 20% of the Palestinian GDP. Those earning 1750 NIS ($510) per month or lower will receive their June salaries in full, while those earning more will receive no less than NIS 1750, but no more than 50% of their salaries.
Education and healthcare workers were given first priority on Monday, with the remaining employees to be paid on Tuesday. The announcement of reduced salaries provoked disappointment among some Palestinians, who are about to celebrate Eid al-Adha, one of the two holiest days in the Islamic calendar.
“Our contribution today will help maintain the delivery of key public services to the Palestinian people amid this extraordinary crisis,” EU Representative Sven Kühn von Burgsdorff said in a statement, stressing that the main aim of the grant was to support employees in the health care and education sector.
The EU, which is the Palestinian Authority’s largest donor, has sent around €2.8 billion ($3.3 billion) in direct aid to the PA since 2008. Counting additional financial commitments to Palestinian civil society and to the United Nations Relief Works Agency (UNWRA) which also benefit Palestinians, the European Union has committed over €1.11 billion ($1.3 billion) between 2017 and 2020 alone.
The grant will provide a desperately needed cash infusion to the Palestinian Authority, which has been undergoing a deepening fiscal crisis. The PA is the West Bank’s largest employer. At a time of immense crisis, even many police officers are only receiving partial pay.
Hebron Chamber of Commerce director Abdu Idris told The Times of Israel earlier this month that the salaries were “a major source of income not only directly for the employees, but for the shopkeepers” who suddenly found many of their customers without money to spend.
PA Prime Minister Mohammad Shtayyeh announced on Monday that the PA will continue to reject tax revenues Israel collects on its behalf in protest of Israel’s plan to annex parts of the West Bank. Aiming to put pressure on Israel, the PA began refusing the tax revenues in late May, which left the PA in a deep fiscal crisis.
“We remain committed to the cessation of cooperation with the occupation, whether that be financial or security related,” Shtayyeh said at a cabinet meeting.
Tax revenues collected by Israel have always constituted a large percentage of the PA budget. Since the coronavirus pandemic began, however, they have become even more essential: The domestic tax base has vanished, with businesses closed and much of the population unemployed and at home. Meanwhile, foreign donors have been busy tending to the crisis in their own countries.
The PA was unable to pay its employees for months, finally mustering enough money to pay parts of May salaries in early July.
The EU grant is far from the only international aid the Palestinians have received during the coronavirus pandemic. In May, the Palestinian Authority received $95 million in international aid.
Still, the aid does not seem have come close to closing the yawning deficit. In a normal month, the PA received $205 million in clearance revenue and spent $244.5 million on civil servants, pensioners and stipends to the families of Palestinians convicted by Israel of terrorism or killed during attacks on Israelis – ten times the amount donated by the EU.