PA finance minister holds emergency talks in Israel on entity’s potential collapse

One of the key issues is the large debt which the PA owes the Israel Electric Company.

By World Israel News Staff

With prevailing uncertainty over the economic future of the Palestinian Authority (PA), the authority’s finance minister Shukri Bishara reportedly is visiting Israel Tuesday to hold talks with Israeli officials and other economic figures in the Jewish State.

One of the key meetings, according to Israeli public broadcaster Kan, is with the director-general of the Israel Finance Ministry, centered around a large debt which the PA owes the Israel Electric Company. There had been a reported plan under the terms of which Israel would deduct the half-billion shekel electricity debt from the tax revenues that Jerusalem collects for the PA and then usually transfers to the authority.

However, a dispute has erupted over the debt, hundreds of millions of shekels, incurred in supplying electricity to Arab residents of eastern Jerusalem, who live under Israeli control, Kan reports. The PA says that it should not have to foot that part of the bill.

The PA rules in Area A of Judea and Samaria and together with Israel in Area B. The self-rule authority is supposed to rule over the Gaza Strip, but the Hamas terror group carried out a coup in 2007.

Israel has been penalizing the PA  for its financial handouts to terrorists and their families by deducting the amount of terror payments from the revenue transfers. Protesting the penalty, the PA has worsened its own financial state by not only refusing to stop paying terrorists, but also by not accepting any of the reduced transfers.

In fact, it was Israel that was said to be considering a compromise in the dispute over the payment of tax revenues.

Asharq al-Awsat, a pan-Arab newspaper based in London, reported in July that Israeli Finance Minister Moshe Kahlon and Palestinian counterpart Bishara had discussed a plan under which Israel would continue to make the terror deduction from the revenue transfers but would also exempt the PA from paying an excise tax on fuel shipments from Israel in order to make up the difference.

Multiple Israeli and Arab media reports have spoken of Palestinian efforts to end the PA’s dependence on Israel by looking for trading partners in the Arab world, in such countries as Jordan and Iraq.

“Palestinian Prime Minister Mohammad Shtayyeh visited Iraq on July 15 to discuss importing Iraqi fuel. This falls within the PA’s quest for gradual economic disengagement from Israel,” reported Al Monitor, a news outlet covering the Middle East, on Thursday.

“On June 7, on the sidelines of the Jordanian-Palestinian Higher Committee meetings in Amman, ‘Palestine’ and Jordan signed three memoranda of understanding in the fields of energy, health, and transport. The memoranda included an energy pact allowing Palestine to refine any oil obtained that may be imported from Iraq in Jordan,” said the Al Monitor report.

Palestinian Authoritytax revenue transfers