Israel’s Finance Minister, Bezalel Smotrich, announced on Wednesday that the country will not transfer much-needed funds to the Palestinian Authority in response to three European countries recognizing a Palestinian state. This decision threatens to deepen the Palestinian government’s fiscal crisis, as it heavily relies on these tax revenues collected by Israel.
The move by Spain, Norway, and Ireland to recognize Palestinian statehood prompted Smotrich to withhold the funds, accusing the Palestinian leadership of campaigning for the European countries’ decisions. This decision comes amidst escalating tensions between Israel and the Palestinian Authority, with Smotrich labeling the authority as “an enemy.”
In addition to withholding funds, Israel also recalled its ambassadors from the three European countries for consultations. Foreign Minister Israel Katz condemned the European moves, stating that they were essentially giving “a gold medal to Hamas terrorists.”
The Palestinian Authority, already facing financial difficulties, has criticized Israel’s withholding of tax revenues as “piracy.” The authority has struggled to pay the salaries of civil servants and maintain essential services due to the financial strain.
The deepening financial crisis in the Palestinian territories has raised concerns among diplomats and analysts, who fear it could lead to further unrest in the Israeli-occupied West Bank. The ongoing conflict between Israel and Palestine has resulted in significant casualties, with hundreds of Palestinians killed in clashes with Israeli forces.
The Israeli government’s refusal to recognize a Palestinian state and its hard-line stance on the issue have complicated efforts to achieve peace in the region. Despite calls from President Biden and Secretary of State Antony J. Blinken for a unified Palestinian Authority governing both Gaza and the West Bank, Israel remains opposed to the idea.
As tensions continue to escalate, the situation in the region remains precarious, with the financial crisis in the Palestinian territories adding another layer of complexity to the longstanding conflict between Israel and Palestine.
