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The PA is begging Europe for money – but it doesn’t need a penny more in aid

Itamar Marcus and Maurice Hirsch  |

Will Abbas lie to the EU as he lied to the Arab League blaming Israel for the self-imposed financial crisis? 

The annual meeting in Europe of the “International donor group for Palestine” comes tomorrow as the Palestinian Authority is experiencing a major financial crisis. The PA has announced that it will be turning to the international community and asking for significant funding.

However, before assisting the PA, the international community must recognize that the entire financial crisis is self-inflicted by the PA, in two different ways. 

1. The PA returned 630 million shekels ($186 million) that Israel transferred to its account 

Under Israeli law, Israel must deduct the amount that the PA pays to terrorist prisoners and their families every month from the tax money that it collects and transfers to the PA. Based on what the PA expended last year rewarding terrorists, as exposed by Palestinian Media Watch in January this year, Israel is now deducting $11.6 million (42 million shekels) per month from $186 million (670 million shekels) tax money that it collects and transfers to the PA. Losing this $11.6 million would not have caused a financial crisis. However, the PA made a decision that if Israel withheld the $11.6 million the PA spends rewarding terrorists - it would refuse to accept the entire $175 million transfer from Israel. 

Meeting with both French and other EU representatives, PLO Executive Committee Secretary and Chief Negotiator Saeb Erekat reiterated “the Palestinian leadership’s decision not to receive the [$175 million] tax money if the [$11.6 million] deduction is carried out.” [Official PA daily Al-Hayat Al-Jadida, Feb. 22, 2019]

And in fact, when Israel transferred the 630 million shekels ($175 million) to the PA last month, the PA returned the money to Israel inflicting on itself a major deficit. The PA’s refusal to accept the money which was already in the PA bank account is what triggered the financial crisis. 

In order to deflect blame from himself for the PA’s financial crisis when Abbas spoke last month to the Arab League Summit in Tunisia, Abbas dishonestly told the delegates that it was Israel who was deducting $200 million from the PA and not that it was a self-imposed crisis:

PA Chairman Mahmoud Abbas: "[Israel] has recently begun to deduct a large part of our money that it collects... which is known as the tax deduction money that amounts to $200 million a month, on the pretext that we are paying salaries to the families of the prisoners, Martyrs, and wounded... We have said and will say to Israel and the entire world that we will not abandon our people, and particularly [not] those among them who have sacrificed. We will continue to support them even if these will be the last financial resources that we have." 

Official PA TV, March 31, 2019; speech at the Arab League Summit in Tunisia

At the meeting in Europe tomorrow when the PA asks for more money, will the PA be honest and explain that it is suffering from a self-imposed financial crisis or will the PA lie to the Europeans as it did the Arab League Summit and say Israel is deducting $200 million a month?

2. Refusal to stop rewarding terror financially

As soon as the PA stops rewarding terror, there will be no need for Israel to withhold any of the tax revenues. Furthermore, according to the Israeli law, Israel will even transfer any monies that had been temporarily withheld. Most European countries likewise refuse to give the PA money to use for paying salaries to terrorists. 

All the PA has to do to continue receiving financial aid is to stop rewarding and incentivizing terror. Then the Israeli and European restrictions on financial support would be rescinded. 

Making the situation worse, the PA decided to put the burden of its self-imposed financial crisis on the Palestinian population. After returning the money Israel transferred to its account, the PA decided to cut the salaries of most of its civil servants by 50%, yet continued paying in full the salaries to the imprisoned and released terrorists and the families of the Martyrs. Currently the non-productive terrorists in prison are receiving full salaries, whereas productive Palestinian workers are receiving only half their pay.

PA Minister of Finance and Planning Shukri Bishara: "At the beginning of the month [March 2019]... the salaries were transferred in full to the prisoners, the wounded, and the Martyrs according to the orders of His Honor President [Abbas]. This is one of the national principles which no force on earth can make us deviate from."

Official PA TV, March 10, 2019

The fact that PA now only pays 50% of the salaries to civil servants raises another important question for Europe: What is the PA doing with the money Europe and other donors have given it specifically to pay these salaries. For example, the UK's Department for International Development (DFID) explains that the money it gives to the PA is specifically for salaries to civil servants: 

"UK financial assistance to the Palestinian Authority this year [2018] has paid the salaries of up to 39,000 teachers, doctors, nurses, midwives and other health and education public servants in the West Bank.” 

Website of the UK's Department for International Development (DFID)

Since the UK is transferring money to the PA to pay salaries in full for all these civil servants, what is the PA doing with the remaining money? Could it be that the PA is using this available money from the UK and other European countries to pay the salaries to terrorists, which the PA is still paying in full? 

Accordingly, the European countries should demand three things from the PA before giving them even one euro: 

  1. The PA must stop returning money to Israel and use the money that Israel has given them to pay its civil servants’ salaries in full;
  2. The PA stop rewarding terror and thereby open the door to more significant financial support;
  3. Demand the PA explain what they’ve done with European money that was designated to pay full salaries to teachers, healthcare workers and other civil servants, who have only received partial salaries.


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