PM Salam Fayyad: We Can’t Pay Salaries Because Israel’s Decision of withholding Tax Money

09.05.11 – 19:24 | PNN – Palestine News Network

Ramallah- PNN – The Palestinian Prime Minister Salam Fayyad announced on Monday evening that the Palestinian Authority will not be able to pay salaries to its employees this month for the first time since 2007 because of Israel’s decision to stop the transfer of tax revenues it collects on the PAs behalf

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PM Fayyad and FR Consulate General Frederick Desagno

Fayyad’s made his statement in a press conference that followed the signing of a 10 million ERU worth of  aid agreement with France at his office in Ramallah city central West Bank. Representing France was Consulate General to the PA Frederick Desagno. The new fund will be added to the 205 million ERU France donated to the PA since 2008.

Fayyad said Israel’s decision had put his government in a “very difficult” financial position adding that the PA had paid salaries to its 150,000 employees promptly on the 5th day of every month since mid-2007. “We are now on the 9th and we have not been able to meet this obligation,” he said.

The Israeli government halted the transfer of tax money it collects at borders on goods going to the Palestinian Territories, which make up 70 percent of PA revenues, shortly after Palestinian factions include Hamas in Gaza and Fatah headed by Palestinian President Mahmoud Abbas singed reconciliation deal last week ending 4 years of division between Gaza and the West Bank.

In Weak of Israel’s Decision to Withhold Palestinian Taxes; The EU approved last Friday 85 million EUR to be send to the PA.  On Friday High Representative for Foreign Affairs and Security Policy/Vice President of the Commission Catherine Ashton said that the new fund will be part of the EU’s support to the Palestinian Authority’s institution-building programme contributing to the salaries and pensions of PA civil servants who work in health and education.

Today PM Fayyad said that the reason behind the lack of salaries are clear; adding that the PA has a 100 million USD deficit that came from 2010 budget in addition to the 30 million USD monthly deficit in this year budget. “We contacted international and Arab donor countries to help us fulfill our commitments.” Fayyad told reporters today.

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