PA Budget Crisis Has IDF on High Alert

PA grappling with financial crisis, cuts workers' pay 40%; to compensate, Israel lets an additional 10,000 workers into Israel.

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Tova Dvorin,

Mahmoud Abbas
Mahmoud Abbas
Issam Rimawi/Flash 90

The Palestinian Authority (PA) is facing a possible coup from within, after Hamas officials declared over the past week their intent to "liberate all of Palestine" - including the PA - and terrorism escalating in Jenin and elsewhere. 

But the PA may soon face bigger problems: a metastasizing financial crisis.

PA Chairman Mahmoud Abbas cut the salaries of tens of thousands of PA workers by 40%, he announced Monday - a move which, according to Walla! News, has the Israeli defense establishment on high alert. 

To counteract the fallout, high-ranking officers in the IDF and in the political echelon have decided within the framework of negotiations to increase the quota of Palestinian Arab workers into Israel to 10,000 daily in order to prevent unrest spreading in the PA streets. 

Approximately 120,000 Palestinian Arabs work in Israel every day; of those, 60,000 are estimated to be working over 1949 Armistice lines, in Jewish communities and Jewish-owned industrial areas. About 30,000 workers are estimated to be illegally employed. 

The PA has repeatedly asked for foreign donations, claiming it is on the verge of collapse due to a worsening financial crisis.

In March 2014, Ramallah announced it had reached a staggering $4.8 billion in debt, with a 2014 budgetary deficit of $1.5 billion.

While blaming Israel for the PA’s financial woes, Abbas continues to spend six percent of the PA’s annual budget to pay $4.5 million a month to jailed terrorists and another $6.5 million to their families.

Wage disputes could lead to full-fledged economic and security crises, as a similar dispute erupted in Hamas-controlled Gaza earlier this year. 

Tensions in the wage war began with the PA-Hamas unity deal in April, after which Hamas's 40,000 employees in Gaza still were not paid backlogged wages by the new unity government even as the PA's 70,000 employees in Gaza continue to be paid.

The rage boiled over into violence, with Hamas eventually shutting down all the banks in Gaza for roughly a week, until in June a financial bail-out from Qatar temporarily stemmed the crisis; however, Hamas's launching a terror war on Israel early in July apparently put off the salary payments even further.