Benjamin Netanyahu’s financial war against the Palestinian Authority

BBenjamin Netanyahu still has no clear plan for the “day after” in Gaza. It is also obvious that he has every interest in prolonging hostilities as long as possible, with the prospect of the re-election in November of Donald Trump, who supported him unconditionally during his four years in the White House. But the Israeli prime minister also knows that prolonging the conflict protects him from both the triple trial against him (for corruption, fraud and breach of trust) and the commission of inquiry that will be imposed on October 7, 2023 on the collapse of Israeli security.

Netanyahu is also opposed to the return of Mahmoud Abbas’ Palestinian Authority (PA) to Gaza, giving Israel the illusory goal of a “total victory” against Hamas. The Israeli leader refuses to reopen the bridges between the West Bank and Gaza for fear of encouraging the emergence of a Palestinian state – even in the long term. And it would be a shame if the PA maintained a “security cooperation” from which Israel benefits most in the fight against Palestinian Islamists.

Israel’s military campaign against Hamas in Gaza, which has already claimed more than 38,000 lives in nine months, is accompanied by intensified repression in the occupied West Bank, where nearly 600 Palestinians have been killed in the same period. The intensity of this violence, in which the settlers play a decisive role with the active or passive complicity of the Israeli army, is, however, exacerbated by the enormous financial pressure on the Palestinian Authority.

The pressure exerted by Netanyahu himself is reinforced by his decision to entrust the finance portfolio to the supremacist Bezalel Smotrich, who makes no secret of his desire to completely colonize the West Bank and Gaza Strip. And paradoxically, Netanyahu and Smotrich found the weapon to financially bring the Palestinian Authority to its knees in the peace agreements between Israel and the Palestine Liberation Organization (PLO) of 1993-1995.

The “Paris Protocol”

The “Oslo Accords,” as they are commonly called, established the “Palestinian Authority,” the result of an agreement between Israel and the PLO, with which it was identified. The PA’s financing rules were laid down in the “Paris Protocol,” signed in 1994 between the Israeli finance minister and the PLO’s development commissioner.

These rules provide for the automatic transfer of all taxes from Israel to the Palestinian Authority, even if they are levied in Israel (value added tax on Palestinian imports, fuel taxes or taxes on Palestinian workers in Israel), within the framework of an Israeli-Palestinian customs union. This arrangement underlines – if proof were needed – the Palestinian Authority’s lack of sovereignty over the territories it merely administers, with powers and resources transferred to it by Israel.

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