On a number of occasions, the EU had accused Israel of stifling the Palestinian economy. The EU, as a major contributor to that economy, felt that not enough progress was made by the Palestinians due to Israeli restrictions. Israel suggested that the EU look closer at Palestinian practices and measures that encouraged corruption. Later, the EU did admit that such corruption existed. In the following statement, Israel explained what it was doing for the Palestinian economy. Text:
A plenary session of the "Dialogue on the Palestinian Economy" was held today (Tuesday) 23.6.98, at the Foreign Ministry between Israel and the European Union.
The European delegation was led by Special Envoy Miguel Moratinos and included British Ambassador David Manning and European Union Ambassador to Israel Jean-Paul Jesse. The Israeli delegation was headed by Foreign Ministry Deputy Director-General for Economics Victor Harel, and included representatives from the Foreign Ministry, Ministry for Labor and Social Affairs, Finance Ministry, Ministry of Industry and Trade, customs authorities and the Coordinator of Activities in the Territories.
The meeting was held in order to prepare an interim agreement for the Dialogue's activity, on the eve of the end of Britain's presidency of the European Union. Progress in the five sub-committees discussing issues of employment and promoting the private sector were extensively covered in the meeting.
Israelis employ over 110,000 Palestinians, including some 15,000 employed in settlements. The number of Palestinians from the Gaza Strip employed in Israel today is nearly 30,000 - the highest number ever. These achievements are the result of efforts made by Israel in recent months, including abolishing the quotas on Palestinian workers, lowering the minimum age of Palestinians permitted to enter Israel to 23, granting 5,000 overnight passes, holding employment fairs, and other measures, some of which are still in the preparation stage. The income from employment in Israel forms an essential component (over 40%) of the Palestinian population's earnings.
In an effort to boost the Palestinian private sector, the number of permits issued to Palestinian businessmen to enter Israel was significantly increased to 18,000. The number of businessmen permitted to travel between Gaza and the West Bank has been doubled, to 2,000. These and other steps have yielded results and increased the transfer of funds to the Palestinians, as reported by the Finance Ministry, indicating an expansion of economic activity in the autonomous areas.
It was agreed that the Dialogue has proven itself as an important pipeline between Israel and the European Union on the issue of the Palestinian economy, and an effective framework that yields results. There was also agreement that it is desirable to expand the scope of the activities held under its aegis, in order to improve the employment situation, and to encourage the private sector and the Palestinian economy as a whole.