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PA Gets EU Bailout

The EU and Sweden step in to save the PA from yet another financial crisis.
By Maayana Miskin
First Publish: 8/12/2011, 9:28 AM

PA heads Haniyeh and Abbas
PA heads Haniyeh and Abbas
Flash 90

The European Union has agreed to save the Palestinian Authority from a financial crisis that led it to stop paying full employee salaries. EU officials are giving 22.5 million euros to help the PA pay its roughly 170,000 public employees.

In addition, Sweden is giving four million euros.

PA Prime Minister Salam Fayyad thanked Swedish officials Thursday, and called on other countries to follow Sweden's lead. He mentioned the Arab world in particular.

Fayyad has accused Arab countries of playing a part in the current crisis by failing to follow through on promises of aid.

International organizations have warned for years that the PA, never a self-sufficient entity, is becoming increasingly dependent on aid. Fayyad argues that the PA is ready for a state anyway.

Fayyad has also claimed that the PA is heading in the right direction, a claim disputed by experts.

Among the elements of the PA economy criticized by experts is the fact that the PA employs more than 170,000 people, despite currently being responsible for an estimated 1.5 million residents. Tens of thousands of the PA employees live in Gaza, where they have continued to receive salaries for several years despite being replaced by Hamas employees in 2007.