update deskIsrael-Palestinian Conflict

Smotrich moves to collapse PA economy after ‘political terrorism’

Israel's finance minister is acting in response to Ramallah's pursuit of unilateral statehood, ICC prosecution.

Finance Minister Bezalel Smotrich leads a faction meeting of his Religious Zionism Party in Givat Harel, Feb. 14, 2023. Photo by Sraya Diamant/Flash90.
Finance Minister Bezalel Smotrich leads a faction meeting of his Religious Zionism Party in Givat Harel, Feb. 14, 2023. Photo by Sraya Diamant/Flash90.

Israeli Finance Minister Bezalel Smotrich on Wednesday called for a series of punitive steps against the Palestinian Authority in response to Ramallah’s push for unilateral statehood and support for the International Criminal Court case against the Jewish state.

In a letter to Prime Minister Benjamin Netanyahu, the finance minister announced his intention to immediately halt the transfer of all monthly tax revenues that Jerusalem collects on behalf of the P.A.

The announcement came hours after Norway, Ireland and Spain declared their recognition of a Palestinian state, in decisions that the Palestinian Authority and the Hamas terrorist organization welcomed.

Oslo in recent months has been serving as an intermediary to transfer some funds earmarked for the P.A. that Israel froze in the wake of the Oct. 7 Hamas-led terrorist massacre in the country’s south.

“Norway was the first to unilaterally recognize a Palestinian state today, and it cannot be a partner in anything related to Judea and Samaria. I intend to stop the transfer funds and demand the return of all funds transferred,” Smotrich wrote to the prime minister.

Approximately 1 billion shekels ($272 million) has been parked in Norway over the past three months, while Jerusalem transfers some 600 million shekels ($163 million) to Ramallah directly every month.

“The Palestinians are working against Israel with political terrorism and promoting unilateral measures around the world—I cannot continue to transfer funds to them. If this causes the P.A. to collapse, let it collapse,” Ynet cited Smotrich as saying.

The finance minister also decided to cancel a waiver shielding major Israeli banks with business ties to Ramallah from lawsuits stemming from charges of supporting terrorism, a move that the United States previously warned would collapse the Palestinian Authority’s economy.

In addition, the Religious Zionism Party leader demands that Netanyahu take a series of steps to bolster Jewish communities in Judea and Samaria, including the immediate approval of 10,000 new housing units, establishing a new town for each country recognizing “Palestine” and advancing a proposal to strengthen Israel’s hold on the area.

Smotrich is also requesting that the government permanently revoke all VIP travel passes for P.A. officials and impose additional sanctions on those leading the campaign against Israel in international bodies.

“I and many other ministers have made an unequivocal demand to take severe measures against the Palestinian Authority for its unilateral actions against Israel, including its pursuit of unilateral recognition of statehood at the U.N. and through bilateral agreements with several countries, and the legal battle it’s waging against the State of Israel in the international court at The Hague to stop the war,” wrote the minister.

“I don’t intend to allow officials to dismiss the issue. There’s urgency for an immediate response that will impose a significant cost on the P.A. for its actions and deter it and other countries,” he said.

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