Arab League Secretary General Ahmed Aboul Gheit said that Palestine’s budget deficit reached $700 million this year.
His statement came during an emergency meeting of the Arab foreign ministers in Cairo on Sunday.
“We are able to support the Palestinians through the financial safety net, or in any form of financial support, including grants or even loans, in order to help them overcome the pressing and dangerous crisis,” he said.
In a statement issued at the end of the meeting, the ministers emphasized their commitment to the decisions of the Arab League, with regards to the establishment of a financial safety net to support the budget of the Authority, worth $100 million per month.
The finance ministers stressed “Arab support for the political, economic and financial rights of the State of Palestine and the need to ensure its political, economic and financial independence.” They also condemned the “Israeli hijacking of the Palestinian people’s money” and called on the international community to exert pressure on the Israeli government in this regard.
The Arab finance ministers proposed to provide soft loans within the safety net through a bilateral agreement with Palestine, and to continue to support infrastructure and development projects through financial aid or soft loans.
The final communiqué also called on Arab funds and institutions, as well as Arab banks, to contribute to the financial safety net by providing soft loans to the State of Palestine in direct coordination with the Palestinian competent authorities.
Shoukri Beshara, the Palestinian minister of finance and planning, had earlier called on Arab finance ministers to “activate the Arab safety net in accordance with the resolutions of the League of Arab States,” noting that Israeli sanctions put the Palestinian economy at a critical juncture.
