Netanyahu orders release of tax money to Palestinian Authority

Netanyahu orders release of tax money to Palestinian Authority
Prime Minister Benjamin Netanyahu, shown speaking after Israel's president asked him to form a new government, ordered the release of frozen tax revenues to the Palestinian Authority on Friday. (Dan Balilty / Associated Press)

Israel announced Friday that it would release Palestinian tax revenues frozen this year as a punitive measure after the Palestinian Authority’s move to join the International Criminal Court.

A statement from Prime Minister Benjamin Netanyahu’s office said he had accepted the recommendation of Defense Minister Moshe Yaalon, the army and security agencies to release the frozen funds.

The Palestinian Authority moved to join the Hague-based court on the last day of 2014. Israel swiftly responded by suspending monthly transfers of tax revenues it collects on behalf of the Palestinian administration in keeping with the 1993 Oslo accords.

The freeze on revenues that exceed $120 million a month was costing the Palestinian Authority 70% of its budget, Palestinian Finance Minister Shukri Bishara said in a World Bank seminar on the matter last month.


The Israeli move was met with widespread international criticism and increased concern that the chronically cash-strapped Palestinian Authority could collapse entirely and tumble the region into anarchy.

Similar concerns were voiced by Israeli military and intelligence officials, who advised the prime minister to release the money to avoid undermining Palestinian stability.

Some $600 million short since the freeze went into effect, the Palestinian Authority has been paying its 180,000 civil servants 60% of their salaries and had moved to slash expenditure of government ministries by half. This week, the cabinet approved an emergency budget starting April 1, according to the authority's official news agency WAFA.

On Friday, Netanyahu ordered the release of the money accrued in recent months, although Israel would deduct a portion to offset Palestinian debts for service provided by Israel, including electricity, water and hospitalization.

Last month, the Israel Electric Corp. briefly cut off power to parts of the West Bank to protest a massive $500-million debt.

The decision to release the funds comes after Netanyahu's victory in last week's election, which may have freed him politically to respond to persistent security officials' recommendations to resume the tax transfers.

In Washington, State Department spokesman Jeff Rathke welcomed Netanyahu's decision.

"This is an important step that will benefit the Palestinian people and help stabilize the situation in the West Bank," he told reporters, according to the Associated Press. "We hope that both sides will be able to build on this and work together to lower tensions and find a constructive path forward."

The move might help ease tension between Netanyahu and the White House, which has criticized his policies with increasingly stronger words since his reelection, suggesting the Israeli leader should not assume automatic U.S. support to counter Palestinian moves at the United Nations and other international bodies.

Netanyahu's office said Friday's decision was "based on humanitarian concerns and in overall consideration of Israel's interests at this time."

Sobelman is a special correspondent.