Palestinian Prime Minister Ismail Haniya told the first meeting of the Hamas-led cabinet that the government is facing a severe financial crisis, saying, "The Ministry of Finance has inherited an entirely empty treasury, in addition to the debts of the ministry and the government in general," Haniya said, without giving any figures on the Palestinian Authority (PA)’s debts.
The Prime Minister noted that the new government is doing its best to pay the salaries of 140,000 Palestinian Authority workers despite a cash crisis mainly caused by Israel’s decision to seize Palestinian tax money after Hamas won the January legislative elections. Such a seizure of tax money is illegal under international law, but are routinely carried out by Israel against the Palestinian people, as Israeli authorities control and collect Palestinian import and export taxes.
The U.S., and European Union, which both classify Hamas as a terrorist group, threatened to cut aid to the Palestinian Authority unless Hamas recognizes Israel’s right to exist, gives up anti-Israeli attacks and accept past peace accords. But Hamas, which slammed these demands as “blackmail”, vowed to make up for any cash shortfalls with aid from other Muslim countries.
Palestinian Finance Minister Omar Abdel-Razeq said the government will receive $80 million from Saudi Arabia, Kuwait and the United Arab Emirates to help pay March salaries, totaling about $118 million, that were due to be paid earlier this week.
But Ismail Haniyeh made clear that the pledge of financial aid to the Palestinians made at last week’s Arab Summit is insufficient.
"The Arab Summit decision regarding the funding is not sufficient to meet the demands of our people," Haniyeh told a news conference. He said his government is in touch with Arab leaders "to discuss the economic problems we are facing and to propose plans to develop our economy."
The prime minister deemed the latest Israeli military air attacks in Gaza targeting the stadium and the presidential compound a "critical development", noting that the escalation in Gaza has been accompanied by similar Israeli military aggression in the Palestinian West Bank.