Netanyahu, Kahlon reportedly plan for possible financial collapse of PA

Netanyahu, Kahlon reportedly plan for possible financial collapse of PA

Israel has reportedly tried to transfer $182 million to Palestinians, but was rebuffed; finance minister said to meet with PA official to discuss issue

Prime Minister Benjamin Netanyahu (right) and Finance Minister Moshe Kahlon, in Jerusalem, on March 11, 2019. (Aharon Krohn/Flash90)
Prime Minister Benjamin Netanyahu (right) and Finance Minister Moshe Kahlon, in Jerusalem, on March 11, 2019. (Aharon Krohn/Flash90)

Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon have reportedly discussed emergency plans, should the Palestinian Authority’s financial system collapse over its refusal to accept tax dividends collected by Israel, according to television reports Sunday.

The two met Sunday to discuss what plans to put in place and what possible moves would keep the Palestinians solvent, amid fears that financial woes could cripple the Palestinian economy and destabilize the West Bank, according to the reports.

Israel announced in February that it would withhold $138 million in monthly payments to the PA — to offset the PA’s payments to Palestinians jailed by Israel for terrorism and violence, and to the families of dead terrorists.

The Palestinians have protested the law, refusing to receive any of the taxes Israel gathers for them on a monthly basis, as long as the Jewish state does not transfer them their full amount.

The taxes Israel collects and transfers to the PA make up hundreds of millions of shekels, more than half of its monthly budget.

According to the Kan public broadcaster, Israel recently tried to transfer $182 million to the PA, but the transaction was rejected.

Palestinian Authority President Mahmoud Abbas (C) is greeted upon his arrival at the Arab League headquarters in the Egyptian capital Cairo, to discuss the latest developments in the Palestinian territories, on April 21, 2019. (MOHAMED EL-SHAHED / AFP)

Netanyahu and Kahlon on Sunday discussed whether to persuade PA president Abbas to accept the funds, Channel 12 reported.

Kahlon on Saturday also met with a senior PA official to discuss its financial woes, according to Channel 13, amid mounting concern over the issue.

Both the Prime Minister’s Office and Abbas’ office declined to comment, the TV reports said.

Last Sunday, the Arab League pledged $100 million per month to the Palestinian Authority to make up for funds withheld by Israel.

Earlier this month, France sent an official letter to Israel urging it to “change your decision to freeze the transfer of tax funds to the Palestinian Authority,” Israel’s Channel 12 news reported last Sunday. Israel rejected the request as “immoral” and against the EU’s own laws.

PA Finance Minister Shukri Bishara announced recently that Ramallah had undertaken a a series of austerity measures to mitigate against the impact of the lack of funds on government operations, including the slashing of public employee salaries.

A senior Palestinian Authority official reportedly warned that Hamas means to exploit the economic situation in the West Bank and pay off PA officers and security forces to take control of the territory.

In March, many PA employees received only half of their salaries.

The World Bank warned last week of an economic crisis, if the issue is not resolved.

Israel, which collects taxes on behalf of the PA, says the PA payments to terrorists and their families encourage further violence. The PA claims they are a form of welfare to families who have lost their main breadwinner.

AFP, Adam Rasgon contributed to this report.

Join us!
A message from the Editor of Times of Israel
David Horovitz

The Times of Israel covers one of the most complicated, and contentious, parts of the world. Determined to keep readers fully informed and enable them to form and flesh out their own opinions, The Times of Israel has gradually established itself as the leading source of independent and fair-minded journalism on Israel, the region and the Jewish world.

We've achieved this by investing ever-greater resources in our journalism while keeping all of the content on our site free.

Unlike many other news sites, we have not put up a paywall. But we would like to invite readers who can afford to do so, and for whom The Times of Israel has become important, to help support our journalism by joining The Times of Israel Community. Join now and for as little as $6 a month you can both help ensure our ongoing investment in quality journalism, and enjoy special status and benefits as a Times of Israel Community member.

Become a member of The Times of Israel Community
read more: