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France ups PA aid as Israel holds tax funds

May 9, 2011 9:12 P.M. (Updated: May 11, 2011 11:04 A.M.)
RAMALLAH (AFP) -- France on Monday announced it would donate 10 million euros ($14.3 million) to the Palestinian Authority after Israel froze tax revenue transfers following a Palestinian unity agreement.

The aid infusion came as Palestinian Authority Prime Minister Salam Fayyad told reporters his government was unable to pay employees because of Israel's decision to halt revenue transfers after Fatah and Hamas inked a unity deal.

"The Palestinian Authority cannot pay the salaries for the month until the Israeli government transfers the money," he said.

"If Israel transfers this money we will be able to pay the salaries immediately."

The French foreign ministry criticized Israel for suspending transfer of Palestinian money after the Fatah movement signed a surprise unity deal with rival Islamist group Hamas.

"At a moment when the financial situation of the Palestinian Authority is stretched, these funds are a contribution to the payment of government employees' salaries," foreign ministry spokesman Bernard Valero said in Paris.

Valero criticized Israel's decision to not "transfer to the Palestinian Authority tax revenue to which it has a right."

He said Israel's decision was "detrimental to the reforms and the establishment of institutions put in place under the authority's President [Mahmoud] Abbas."

The aid infusion was formalized at a signing ceremony between Fayyad and France's Jerusalem consul-general Frederic Desagneaux in Ramallah on Monday.

"This payment intervenes in a critical moment and we hope it will have an inducive effect for it is important that the donor countries pursue their efforts in budgetary aid in favor of the Palestinian Authority," Desagneaux said in a statement.

The European Union announced last week it would offer the Palestinian Authority an additional 85 million euros in aid after Israel blocked the transfer of tax revenue in the wake of the unity agreement.

Israel's Finance Minister Yuval Steinitz said he had ordered the suspension of the revenue transfers until he could be sure that none of the funds would go to Hamas.

But his decision to suspend the transfers has been criticized inside Israel and abroad.

Valero on Monday welcomed the EU's decision to offer the Palestinian Authority additional aid, after Palestinian officials warned they would be unable to pay employee salaries without the tax revenues.

"We consider that the current Palestinian government, under the leadership of Salam Fayyad, has presented all the necessary guarantees of transparency in public finances and good use of international aid," Valero said.

"We expect that any future Palestinian government will maintain these guarantees."

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