Foreign Ministry Statement on meeting of Donor Countries

A major issue facing the Palestinian Authority and the countries that supported the peace process, was how to fund the current expenditures of that Authority. One of the reasons for the delay in transferring funds to the Palestinian Authority was lack of detailed projects and legal obstacles. Above all the donor nations were waiting for the conclusion of the second phase of the Israel-PLO agreement. Text:

At the meeting of the local representatives of the donor countries to the Palestinian Authority held today (Monday), 08.05.95, in Jericho, it was announced that the "Holst Fund" - which was supposed to fund the Palestinians' current expenses - has been emptied. Palestinian police personnel received their April salaries, but the Palestinian Authority was obliged to resort to bank overdrafts to pay the salaries of its other public sector employees. At their meeting in Paris two weeks ago, the donors promised to finance $70 million of the Palestinian Authority's current expenses. According to the draft budget submitted by the Palestinian Authority, its deficit for this year is estimated at $136 million.

The Israeli representative, Foreign Ministry Deputy Director-General for Economics Oded Eran, announced an additional easing of the conditions on the passage of Palestinian workers, goods and vehicles into Israel. Similarly, he announced that Israel has recently transferred to the Palestinian Authority NIS 2.3 million in taxes and duties collected from Palestinians. Since the signature of the Gaza-Jericho Agreement in May l994, Israel has transferred NIS 207 million.

A number of representatives complained of delays in the preparations for the construction of industrial parks and expressed the hope that Israel and the Palestinian Authority will complete these preparations, including the preparation of a common Israeli-Palestinian position paper and the creation of the legal infrastructure by the Palestinian Authority.