On Wednesday, Palestinian Finance Minister Shukri Bishara called for immediate intervention by the international community to restore Palestinian financial rights, through Israeli deductions from tax funds.

Bishara's statements were made in a speech he made during his participation in the work of the International Liaison Committee (AHLC) held in the Belgian capital, Brussels, in which he confirmed that the total financial deductions withheld by Israel in the last 4 years exceeded 800 million US dollars.

He said that the Israeli deductions added more difficulties to the Ministry of Finance and the government in fulfilling their obligations, which also coincided with a significant decline in foreign grants directed to the public treasury.

He called on the international community to engage in a serious international dialogue, with the aim of amending the unfair conditions contained in the Paris Economic Protocol, which affect all vital Palestinian economic sectors, and bridging the large gap between the financial rights guaranteed by the agreement, which Israel has violated many times.

He continued, "There is an important role played by the donor community in defending the Palestinian cause and liberating the Palestinian economy from dependence on the Israeli economy, as pressure towards amending the Paris Economic Protocol will contribute to easing restrictions on the Palestinian economy."

He believed that it is important to take practical steps and find a sustainable financial program for the State of Palestine, to control the budget deficit and reduce it gradually, to pave the way for financial stability and recovery of the Palestinian economy amid the continued violations of the occupation.

During his speech, Bishara gave an explanation about the Palestinian financial and economic situation, indicating that the Palestinian government is working under huge challenges.. "The budget deficit constitutes a threat to the Palestinian economy."

He expected the current year 2023 deficit to rise to more than $609 million, up from $359 million, or 46%, in the event that illegal Israeli deductions from clearance funds continue.

He said that the continuation of the current deficit affects the Palestinian social stability, due to the lack of a national currency and a central bank with full powers, to refinance the debt and cover all the obligations of the government.

Regarding the Palestinian banking sector, Bishara said that it is exposed to the risks of lack of cash liquidity, and the political fluctuations inherent in the Palestinian system due to the Israeli occupation, which prevents economic progress.

And he continued: “The government approved the budget this year as an emergency budget, amid the continuing financial crisis due to the occupation, indicating that the budget for the current year reflects revenues of $5.38 billion, an increase of 6% over the previous year, and against that we will witness an increase in expenditures by 12% from $5.53 billion.” Dollars to 6.18 billion, due to the increase in the salary bill.

He stressed that despite the difficult financial reality due to political and economic challenges, the Ministry of Finance succeeded in increasing public revenues, as it witnessed a growth of 14% last year, following an increase of 22% in 2021.

Because of the Ministry's efforts to maximize revenues, it contributed to compensating for the increase in operating costs and the sharp decline in international support for the budget, in addition to our success in reducing the budget deficit by more than half.

He explained that the deficit was reduced from $971 million in 2021 to $416 million in 2022, and had it not been for the illegal Israeli deductions, the year would have ended with a deficit of $242 million.