EU Proposal for Israeli-Palestinian Tax Crisis: PA to Pay Prisoners Regardless of Felonies

Offer Europeans willing to mediate would see Palestinian prisoners paid based on families' socioeconomic status, not their crimes

The EU's Federica Mogherini arrives with Palestinian Prime Minister Mohammad Shtayyeh before their annual spring meeting of the International donor group for Palestine at the EU headquarters in Brussels on April 30, 2019.
AFP

EU officials have proposed that Palestinian prisoners receive stipends based on their financial state and not the crimes they committed, in an attempt to forge a compromise that would save the Palestinian Authority from financial collapse.

Israel reduced its payments to the PA in February, deducting the sum that the authority pays to security prisoners in Israeli prisons and their families. In response, the PA has been refusing to accept any money.

This money — from taxes that Israel collects on behalf of the PA — accounts for 63 percent of the PA’s budget.

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Senior PA officials had said Monday that Palestinian President Mahmoud Abbas had no intention of compromising on the tax-transfer issue, even though this puts the authority at risk of collapse.

According to the officials, the only leverage the PA has is the fear in the United States, Arab countries and Israel that the PA’s collapse would lead to chaos in the West Bank.

“For years we’ve been talking to Israel, and with the entire international community, about how the existence of the PA is an important element in the stability of the West Bank,” a Palestinian official said.

On Tuesday, EU officials and the Ad Hoc Liaison Committee met in Brussels and proposed to mediate between Israel and the Palestinian Authority.

Sources at the meeting told Haaretz that the EU’s proposal “is similar to Israel’s national insurance.”

Until such a proposal is finalized, EU officials in Brussels have asked PA representatives to consider accepting Israeli tax transfers “on a provisional basis.”

Brussels was careful to note that this “does not constitute a legal or political endorsement of Israeli deductions.”

This would prevent a humanitarian crisis and a financial collapse, which sources say could happen within several months if the PA refuses to accept the money.

Representatives of the international community said they could not cover the financial needs of the Palestinian Authority if it continues not accepting the transfers.

Meanwhile, Israel has transferred PA taxes, from which it deducted the sum intended for payment to prisoners, and is awaiting to see if the funds will be returned in protest.

Other sources said Palestinian Prime Minister Mohammad Shtayyeh fiercely criticized Israeli sanctions in the meeting, calling the move a grave violation of the financial clauses of the Oslo Accords.

He added that the PA believes flexibility on the matter would set a precedent for Israel to use tax deductions as a weapon. Shtayyeh added that the plight of prisoners is very important for Palestinians, and that a withholding of payments would cause frustration and civil unrest.

Junior American representatives were also present at the meeting, both from the embassy in Israel and the White House, but they did not speak at the session. “It’s clear that there is a rift between the Americans and Palestinians right now,” a source at the meeting told Haaretz.

Washington recently made drastic cuts in aid to the Palestinians, including cuts to various civil initiatives. The change in policy has helped worsen the economy in the West Bank, alongside the grave crisis in the Gaza Strip.

At the conference was the European Union’s foreign affairs chief, Federica Mogherini, as well a representative of the Israeli Foreign Ministry, Yael Ravia Zadok. Also present was a representative of the Israeli military’s Coordinator of Government Activities in the Territories, Col. Sharon Biton, and the director general of the Regional Cooperation Ministry, Joseph Draznin.

The Israeli representatives asked the Ad Hoc Liaison Committee to fund humanitarian projects in the West Bank. They asked for hundreds of millions of dollars for funding COGAT’s flagship project, a large sewage treatment plant in the Gaza Strip.

Mogherini told the committee that in addition to financial assistance, all parties must abide by legal agreements and resume negotiations.

Before the meeting, a PA official explained why the Palestinians would not compromise.

“It’s a clear Israeli interest to preserve stability,” said the official. He added that this interest is shared by Jordan, Lebanon and other Arab states. These countries, though mainly Israel, will have to deal with the security, diplomatic and financial consequences if the PA collapses.

“As far as we’re concerned, let the people take to the streets,” the official said. “We have our backs to the wall. The ones who should feel pressured are all those who have gotten used to having someone handling Palestinian affairs in the West Bank and coordinating security with Israel for 25 years.

“In the event of a collapse there won’t be a vacuum. In Israel they know exactly who will control the field. That’s why Israel ought to rethink this; in the White House they may find themselves without a PA when they present their so-called Deal of the Century, and Jordan and Lebanon will have to explain what they plan to do with the Palestinians in their territories.”

In private conversations in recent days, Abbas has told associates that the current crisis is a tough test for everyone. “The Arab states promised a financial safety net and we expect that promise to be kept,” he was quoted as saying.

Abbas also said that if the PA agrees to accept the tax transfers after the deductions, “then Israel will exploit every opportunity to make more unilateral deductions. That’s why there will be no such situation and Israel will have to reverse its decision and return the money in full.”