DAVOS, Switzerland,(Reuters) – Israel threw into doubt on Friday its willingness to transfer customs revenue to the Palestinians after militant group Hamas won this week’s election.
“We will face practical problems of how you deal with people that call for the destruction of Israel,” Joseph Bachar, director general at the Israeli finance ministry, told the World Economic Forum in Switzerland.
Bachar was referring to customs and value-added tax revenue which Israel collects on behalf of the Palestinians and which he described as the main source for financing the Palestinian budget.
Palestinian Economy Minister Mazen Sinokrot, sitting on the same panel as Bachar, said the Palestinian Authority faced a financial crunch as early as next week if Israel withholds the $40-50 million it hands over every month.
Sinokrot said the cash transfers in question amounted to “monthly revenues exceeding $40-50 million” and Israel was obliged to pay.
“This is not donor money. They have to bring the money, the money for the Palestinian people, they cannot really think otherwise,” he told Reuters.
“Where these salaries should come from for 135,000 employees?” he said. “If those salaries are not coming, this is a message for violence.”
Bachar later told Reuters: “There will be a decision next week” over transfers of the customs and tax revenue.”
Sinokrot acknowledged there were doubts about future funding to the Palestinian Authority from its main donors — the United States, Europe, Japan and the Arab world — because of the uncertainty created by the shock victory of Hamas.
“I think they want to sit and wait to see what is the next step from the Palestinian leadership and the new elected government,” he said.