News Analysis: Israel to continue transferring funds to PNA under international pressure: analysts

11:09, May 06, 2011      

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by Adam Gonn

The Israeli government is facing international pressure as it suspends the transfer of some 89 million U.S. dollars of taxes that it has collected on behalf of the Palestinian National Authority (PNA), in the wake of Hamas and Fatah signing the Egypt-sponsored reconciliation deal.

Local analysts speaking to Xinhua on Thursday estimate that the money will be transferred soon, and that the EU is likely to continue providing aid to the Palestinians at least for now, though there is a strong possibility that the U.S. will end its aid.

ECONOMIC CONSEQUENCES

The current delay of the transfer has lasted a couple of days, a relatively short time compared to the two previous occasions when Israel withheld the funds: one during the second intifada, or Palestinian uprising; the second from February 2006 until July 2007 when Hamas had won the Palestinian parliamentary elections.

Avi Nudelman, CEO of the Israeli-Palestinian Chamber of Commerce and Industry, told Xinhua that at the moment it's too soon to tell what effects Israel's withholding will have, and that he isn't sure whether Israel will boycott the possible Palestinian unity government as no official decision has been taken yet.

"It's not small money. It's very important for the PNA, but now I cannot say what kind of harm it will make," Nudelman said.

Analysts told Xinhua earlier that two-thirds of the Palestinian budget comes from these revenues. Any further delay of the transfer "will certainly hurt the economy and immediately it means that there are no salaries for 170,000 Palestinian civil servants, " said Hanna Siniora, Co-CEO of the Israel Palestine Center for Research and Information.


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