Germany explores financial assistance for Palestinians residing in the West Bank
The Palestinian Authority is currently grappling with an unprecedented political and financial crisis, following the complete blockage of tax funds since May. This situation dates back to the Oslo Peace Process in the 1990s, when a tax agreement between Israel and the Palestinian Authority was established.
Israel, responsible for collecting taxes and customs in the occupied West Bank and Gaza Strip, has been withholding these revenues. This has prompted calls for action from various quarters, including German Development Minister Reem Alabali Radovan (SPD), who has proposed emergency aid of 30 million euros for the Palestinian Authority.
This proposed aid, officially presented in 2024 during discussions in the German government, is intended to partly compensate for the tax revenue blocked by Israel. The money is planned to be paid out via an EU mechanism for salary payments in the health and education sectors in the West Bank.
However, a final decision on the aid has not yet been made. Alexander Hoffmann, CSU parliamentary group leader, has called for clarification regarding these funds, stating that there is a need for transparency about where the money is going. He also emphasised that projects that endanger Israel's security must be clearly excluded.
Foreign Minister Johann Wadephul (CDU) has urged the Israeli government to continue transferring the tax funds that are rightfully due to the Palestinians. Meanwhile, Deputy government spokesman Sebastian Hille said that they are waiting to see what happens in the Bundestag.
Experts fear that the Islamist Hamas could gain political capital from such a situation. A collapse of the Palestinian Authority could open up space for further instability in the West Bank.
The European Union provides support to the Palestinian Authority via the Pegase mechanism, which is linked to reforms and has rules for the use of funds. Germany is in close coordination with the Federal Chancellery, the Foreign Office, and the Federal Ministry of Finance, as they examine additional aid for the Palestinian Authority's budget and discuss additional aid within the EU in light of the situation.
Reem Alabali Radovan (SPD) had urged Israel during a Middle East trip at the end of August to pay the withheld tax funds to the Palestinian Authority. She stressed the importance of humanitarian aid being clear where the money is going.
As the situation unfolds, Germany is carefully considering its role in providing aid to the Palestinian Authority, aiming to support stability in the region while ensuring that funds are used appropriately and securely.
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