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Israel Forces PA to Pay Its Debts

Israel changes strategy and does what it said it would do: Money for PA taxes will be used to pay off part of PA debts for electricity.
By Tzvi Ben Gedalyahu
First Publish: 12/12/2012, 1:03 PM

 Steinitz and PA Prime Minister Salam Fayad
Steinitz and PA Prime Minister Salam Fayad
Flash 90

Israel has decided to pay off Palestinian Authority debts for electricity by using tax money the government collects for it.

Finance Minister Yuval Steinitz ordered that 435 million shekels – more than $110,000,000 – not only will be withheld from the Palestinian Authority, but also will be transferred to the Israel Electric Corp, to cover part of an outstanding debt of  $190,700,000 incurred by the PA during the past year.

About $71,000,000 of that sum has already been transferred to the Corporation, which has had a negative cash flow for several months due to the debt.

“In previous policy crises, it was decided only to delay transferring tax payments to the PA but this time, in an unprecedented decision and following the PA’s unilateral appeal to the UN, Minister Steinitz, in coordination with the Prime Minister signed over the money,” the Finance Ministry stated.

Israel several times has held up transferring to the Palestinian Authority tax money it collects on goods shipped to Arab areas in Judea and Samaria but always backed down in the face of international pressure.

Emphasizing the debts of the PA to the Electric Corp. may make the Israeli action more defensible in the wake of expected criticism by the international community. The European Union chastised Israel for its announcement that it is building 3,000 more homes for Jews in Jerusalem, Judea and Samaria, in reaction to the move to the UN for recognition as a non-member observer state.

The EU charged the move destroys the “peace process," which for years has been a dead issue except among foreign diplomats and media.

Reactions to Steinitz’s move among talkback readers on Israeli websites has been almost overwhelmingly positive, reflecting pre-election polls that indicate a growing mood that the Israeli public has lost its patience with “good will” concessions to the Palestinian Authority.