Report: EU links aid to PA to financial ties with Israel

European Union leaders have told the Palestinian Authority they will refuse to provide any additional financial aid as long as the Palestinians refuse to accept tax revenues collected by Israel, European diplomats and Israeli officials told Barak Ravid of Axios on Wednesday.

The unprecedented ultimatum is another indication that frustration with leaders in Ramallah is growing, even among staunch supporters of the Palestinians.

The background to the standoff is PA chairman Mahmoud Abbas’ announcement in May that he considered all agreements with Israel and the US to be void and would cut off security and civilian coordination with Israel until it reversed its plans to apply sovereignty over Judea and Samaria.

As part of that new position, the Palestinian Authority stopped accepting tax revenues amounting to $15o million per month that are collected on its behalf by Israel.

That decision, combined with the pandemic, has contributed to a financial crisis in PA-assigned areas of Judea and Samaria. The Palestinian Authority has struggled to pay the salaries of officials and members of the security forces, and it’s been taking loans from private banks.

However, Abbas has not reversed the decision even after Israel backtracked on the sovereignty move as part of its normalization deal with the UAE.

According to Ravid, in recent weeks, the Palestinian Authority has asked the EU — as well as several European countries — for urgent loans to pay salaries, Israeli officials and European diplomats say.

But the EU, France, Germany, the UK and Norway made clear that they consider sovereignty to now be off the table, and thus the Palestinians should accept the $750 million in revenues now held by the Israeli Ministry of Finance.

Abbas said he’d refuse to do so unless Israel provided a written commitment that the sovereignty plan is off the table, something which Prime Minister Binyamin Netanyahu has not agreed to do.

After lower-level pressure on the Palestinians didn’t bear fruit, EU foreign policy chief Josep Borrell called Abbas last Wednesday.

He repeated the same message in the call, European diplomats told Ravid. Until the Palestinians resume the acceptance of tax revenues from Israel, the EU will not provide new loans or other financial assistance.

Borrell also urged Abbas to relaunch security and civilian coordination with Israel, but Abbas was noncommittal, the diplomats said.

Jordan and Egypt have passed similar messages to Abbas about the tax revenues and coordination with Israel, according to Israeli officials.

Abbas, notes Ravid, has so far fended off pressure, as he is betting that Joe Biden will win the US Presidential election in November and bring with him a much different set of policies toward the Israeli-Palestinian issue.

A spokesperson for the EU responded to the report and said to Arutz Sheva:

“The EU and its Member States are and continue to be the largest international financial supporter of Palestinians. The EU is a firm supporter of the Palestinian Authority.

The EU and many partners in the international community have encouraged the Palestinians to again accept the transfers of their own tax revenues as it is their money.

There has not been a suggestion of cutting or suspending funds for the Palestinian Authority.”