Palestinian Prime Minister Mohammed Shtayyeh said his government would borrow from banks to pay part of the salaries of employees this month and meet other financial obligations.
Speaking during a cabinet session on Monday, the prime minister announced the “payment of the full salaries of the martyrs and prisoners families, as well as 60% of the public servants’ salaries for May in both the West Bank and the Gaza Strip, in addition to the total amount owed to the employees receiving the salaries segment of NIS 2,000 or less in the West Bank and Gaza, based on the directives of President Mahmoud Abbas.”
In February, Israel began deducting 42 million shekels ($11,584,650) every month from the tax revenues it transfers to the Palestinian Authority (PA). The amount is equivalent to the money paid by the PA to the families of Palestinians killed or imprisoned by Israel.
Since then, the PA has refused to receive the partial delivery of customs duties on goods imported into Palestine and collected by Israel, which has caused a severe financial crisis.
The PA’s decision to borrow from banks comes at a time when funds from the “Arab safety net” do not seem to be available. Palestinian Foreign Minister Riyad al-Maliki said earlier that the authority could resort to banks if the funds of the Arab safety net approved at the recent meeting of the Arab foreign ministers could not be provided.
The Authority is considering borrowing from financially capable countries, such as China, Japan and South Korea, along with banks, under the guarantee of funds held by the Israeli side.
Last month, the Arab League foreign ministers endorsed a commitment to support the Palestinian budget and the implementation of the Tunis Summit decision to activate a financial safety net of $100 million per month to meet the political and financial pressures facing the PA. To date, the Authority has not received any funds.
