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Palestinian Authority grapples with financial crisis, mulls pay cuts for employees

Mona Kandil
Press TV, Ramallah

The Palestinian Authority is presently experiencing the worst financial difficulties since its inception more than a quarter-century ago.

PA officials say this could soon reflect on the party's ability to pay salaries to its employees and conduct daily businesses.

The European Union is the PA’s largest single donor, but the bloc has not announced any aid to the Fatah-led authority so far in 2021.

Palestinian Prime Minister Mohammed Ishtaye told his cabinet recently that the PA has also not received any financial aid from the Arab countries in two years.

Along with the longstanding fiscal leakages fueling the financial crisis, Israel continues to deduct millions of US dollars every month from clearance revenue transfers. This is in response to payments by the Palestinian Authority to the prisoners held in Israeli jails, their families and the families of those killed by Israeli regime forces.

Meanwhile, the World Bank has called on donors to help reduce the budget deficit of the PA, saying that the financial situation remains fragile due to high public spending and very low external financing to the authority.

Observers have expressed concern that the increasingly cash-strapped PA could eventually face financial collapse.

PA officials say the main reason behind the financial crisis is lack of international and Arab donations to Palestinians.


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