After EU Countries Recognize ‘Palestine’, Smotrich Announces Financial Steps To Crush PA

JERUSALEM (VINnews) — In the wake of the announcements by several European countries, including Spain, Ireland, and Norway, that they will unilaterally recognize a Palestinian state, Finance Minister Bezalel Smotrich has declared a significant nonviolent response which has elicited sharp responses worldwide, according to an Arutz Sheva report.

In his announcement, Smotrich said that he would take financial steps to topple the Palestinian Authority in Judea and Samaria, where the European countries have declared they would recognize “Palestine.”

Among these steps is a complete halt to the transfer of tax money to the Palestinian Authority, and no extension of the indemnity extended to banks which transfer money to banks in Judea and Samaria.

Smotrich also called on Prime Minister Benjamin Netanyahu to take a number of financial steps which will deal a critical blow to the Palestinian Authority and may cause its economic collapse within a matter of months.

If Smotrich implements his plan, Israeli banks will cease cooperation with PA institutions, leading to a significant decrease or total cessation of the import of crucial products such as food products, electricity, and water to Judea and Samaria. The salaries of PA employees will also not be transferred if the financial cooperation between Israeli and PA banks grinds to a halt.

Speaking to the Financial Times, senior US and European officials warned of an “economic catastrophe” which could topple the PA in the wake of Israel’s moves.

US National Security Adviser Jake Sullivan said at a news conference, “I think it’s wrong on a strategic basis, because withholding funds destabilizes the West Bank. It undermines the search for security and prosperity for the Palestinian people, which is in Israel’s interests. And I think it’s wrong to withhold funds that provide basic goods and services to innocent people.”

Polls have shown that over 80% of Palestinian Authority Arabs support the October 7 rape, torture, kidnappings, and massacre and believe that the violence against innocent civilians, including women, children, and infants, was justified. A different poll showed that 90% of Arabs in the PA do not believe Hamas committed any atrocities on October 7.

Eytan Fuld, a spokesman for Mr. Smotrich, explained that the Palestinian Authority “are acting against Israel legally, diplomatically and for unilateral recognition. When they act against the state of Israel, there must be a response.”

Smotrich’s plan will be discussed at the G7 summit this week in Italy, two Western officials said.

Under the Oslo accords, Israel collects customs and import taxes on behalf of the Palestinian Authority, and transfers the funds to it. Israeli banks enjoy an indemnity which allows them to transfer funds to financial institutions under control of the Palestnian Authority without being exposed to legal steps which would punish them for financing terror. This indemnity is crucial, since the Palestinian Authority funds terror, paying terrorists salaries according to how many people were injured or killed, and whether the Jewish victims suffered light, moderate, or severe injuries, or death.

Palestinian Authority chief Mahmoud Abbas prioritizes salaries for terrorists over the salaries of his own employees: When funds get tight, PA employees do not receive salaries, but terrorists continue to receive salaries from the PA. Abbas has repeatedly promised to spend every last penny of the PA’s money funding these terrorists, whom he dubs “martyrs.”

In addition, multiple PA policemen have been involved in terror, and the PA is constructing a luxury town for terrorists and their families.