From the Liveblog of
Thursday, January 25, 2024
PA in talks with UAE, Norway for loan covering Gaza funds Israel trying to block — diplomat
Jacob Magid is The Times of Israel's US bureau chief
The Palestinian Authority is in talks with the United Arab Emirates and Norway about Abu Dhabi or Oslo offering Ramallah a monthly loan to compensate for the hundreds of millions of dollars in tax revenues that Israel is trying to withhold from the PA, a senior Western diplomat tells The Times of Israel.
Israel has been withholding NIS 275 million ($75 million) in tax revenues that it collects on Ramallah’s behalf. The figure amounts to the sum that the PA uses to pay services and employees in Gaza. The Israeli cabinet voted in November to withhold the Gaza portion from the monthly transfer on the grounds that the funds could be funneled to PA-rival Hamas.
In protest of the move, the PA has refused to accept any of the tax revenues, which make up the vast majority of its annual budget, placing Ramallah at risk of financial collapse.
The Israeli decision was heavily criticized by the Biden administration, which has demanded that Jerusalem release the funds, since they belong to the PA.
Last week, the cabinet approved a compromise that will see the funds transferred to Norway, which will only be able to release them to the PA if Finance Minister Bezalel Smotrich — a far-right lawmaker with a particularly adversarial relationship with the PA — gives the go-ahead. The Israeli framework also bars the PA from ever transferring those funds to Gaza and would indefinitely block Ramallah from receiving those tax revenues if the outline is violated.
While the new framework leaves open the possibility that the PA will at least be able to access the Gaza portion of the funds in order to pay for services in the West Bank, Ramallah believes that Smotrich will likely take months before he allows Norway to release the tax revenues, a Palestinian official says.
Accordingly, the PA is working on an end-around that would give them faster and more guaranteed access to the $75 million monthly transfer via bank loans from either the UAE or Norway, the senior Western diplomat says. The Gaza portion makes up roughly 25 percent of the total monthly tax revenues.
“Without the monthly NIS 275 million, the PA will not survive. There would be no point in the whole agreement with Norway,” the diplomat adds.
