Norway deal averts Palestinian financial collapse: Government

AFP , Monday 19 Feb 2024

Norway, which heads the international donor group for the Palestinians, said it has negotiated a temporary scheme between Israel and the Palestinian Authority (PA) to avert a financial collapse for the territories.

Jonas Gahr
Norwegian Prime Minister Jonas Gahr Store speaks to the media. AFP


Under a 1994 agreement, the PA receives taxes, so-called clearance revenues, that Israel collects on its behalf -- but Israel has withheld some of these since October 7, to prevent payments to the militant group.

The Palestinian Authority has refused to accept any transfers unless Israel changes its decision, an impasse that has lasted for several months.

The clearance revenues account for about 65 percent of the PA's income.

"Together we have agreed on a temporary solution in which Norway will serve as an intermediary for holding the portions of the clearance revenues tax that Israel has withheld since October 7," the Norwegian government said in a statement late Sunday.

"The Palestinian Authority is then willing to accept the other funds. The Palestinian Authority has welcomed this arrangement and appreciates the effort to find a temporary solution in this extraordinary situation," the statement said.

The portion of the revenues that Israel will transfer to Norway will remain in a Norwegian account until the parties agree on whether Norway may release the funds to the Palestinian Authority.

Norwegian Prime Minister Jonas Gahr Store hailed the agreement.

"With our assistance to this solution, the Palestinian Authority will be able to pay salaries, thus making it possible to continue to provide essential services to the Palestinian population, keep schools open, and ensure that health workers are paid," Gahr Store said in the statement.

"This is critical to promoting stability in the region and for the Palestinian Authority to have legitimacy among its people," he said.

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