Palestine economy paralyzed


Reaping the terror harvest
Hamas needs cash.

Desperately.

As in they haven't made their March payroll.

As a possible drastic solution, the cabinet minister said Hamas would not object to Palestinian Authority employees opening personal accounts so Arab and European donors could pay their salaries directly, an option some donors were considering.

Western diplomatic sources, speaking on condition of anonymity, said Hamas had been trying to move the Authority's treasury account from the Arab Bank to a local Palestinian bank to try to minimise the risk foreign funds would be frozen.

But the sources said other banks had so far balked at the request, in part because of the Authority's precarious finances and because of fears of a legal backlash from regulators in the United States and Europe.

"Pressure is being put on everyone that can be pressured," said a source familiar with Western efforts to squeeze the Palestinian banking system.

The source said the message from U.S. and European officials to regional banks and donors was: "If not cut them off, then at least slow up considerably any funding."

Hamas took control of the Palestinian Authority last week, after winning parliamentary elections in January.

The Israeli government has frozen tax revenue transfers to the Authority, and its banks have started severing remaining financial ties.

The Hamas-led government also faces a threatened cut in direct Western aid unless it renounces violence, recognizes Israel and abides by interim peace deals.

I've been watching close. I see this as an encouraging sign. Let people choose between money and terror.

— NeoWayland

Posted: Fri - April 7, 2006 at 04:37 AM  Tag


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