PALESTINE: EU promises support to PA as Israel withholds tax revenues

EU officials met with the Palestinian minister of finance, Shukri Bishara, and the governor of the Palestinian Monetary Authority (PMA), Feras Melhem, to discuss the impact of the ongoing war by Israel against Gaza on the Palestinian economy.

The economy has suffered US$2.3 billion in losses since the beginning of the war on Gaza, according to the Palestinian Ministry of Economy.

The World Bank recently warned that it expects the West Bank and Gaza economy to contract by 3.7% because of the war. It initially anticipated a growth of 3% in 2024, but now it expects an overall contraction of 6%. This adjustment is based on the assumption that the severity of the conflict will decrease this year.

Israeli deductions of Palestinian tax revenues, which violate existing agreements and risk leading to the collapse of the Palestinian Authority, have compounded the financial problems facing the Palestinian Authority.

‘The EU is working with international partners to address this issue and find immediate solutions’, the EU said.

‘The EU and the European Investment Bank will continue to support the PMA’s role in ensuring a resilient banking sector and providing crucial financing to businesses during these challenging times’, the statement added.

The Palestinian Authority relies heavily on tax funds Israel collects on its behalf to pay salaries and the delivery of public services.

Recent US efforts to persuade Israel to release the tax returns to the cash-strapped PA have failed.

Last October, following the Hamas attacks, Israel’s far-right ultranationalist finance minister, Bezalel Smotrich, stopped the transfer of all of the tax revenue funds.

However, the Israeli government said that it would transfer a partial amount, excluding what it says goes to Hamas-run Gaza.

The PA has thus far refused to take a partial transfer of the funds.

Clearance revenues, which are import taxes collected by Israel on behalf of the PA, have become a political blackmail tool of successive Israeli governments. These revenues account for roughly 65 per cent of the PA’s budget.

12 February 2024

EU: The EU has agreed on new financial rules to be adapted to each country’s situation

The Council and the European Parliament reached an agreement on the reform of the EU tax rules which, after four years of being frozen by the pandemicwill again limit the debt and deficit of the Member

Read More
25 March 2025

BARBADOS: Barbados Calls Out Broken Climate Finance System

Patrick McCaskie, Permanent Secretary in the Ministry of Economic Affairs and Investment, says the current global system is failing to solve the climate and development crisis. This failure is hurting

Read More
24 May 2024

CYPRUS: Astons Unveils Exceptional Cyprus Real Estate Investment Opportunities with Enhanced Golden Visa Benefits

Astons, a global investment residency and luxury real estate leader, is thrilled to introduce its premier Cyprus real estate investment opportunities. These meticulously selected properties are not

Read More
4 July 2025

UK: UK government bond markets rally after Starmer backs Reeves

UK government bonds have rallied after Keir Starmer backed Rachel Reeves to remain as chancellor for “a very long time” despite lingering investor concerns over a multibillion-pound hole in Britain’s

Read More