Fin24

Israel sought $1bn IMF loan for Palestine

2012-07-02 12:41

Jerusalem - Israel unsuccessfully sought a $1bn loan from the International Monetary Fund (IMF) for transfer to the Palestinian Authority to prevent its financial collapse, Israeli and Palestinian officials said on Monday.

The IMF turned down the request, according to Israel's Haaretz newspaper, because it did not want to set a precedent of one state getting a loan on behalf of a none-state body.

The aid-dependent Palestinian economy in the West Bank is facing a deepening financial crisis due to a drop in aid from Western backers and wealthy Gulf states as well as Israeli restrictions on trade.

"We attempted to obtain a loan of $1bn from the IMF through Israel. We didn't succeed," a senior Palestinian official, who spoke on condition of anonymity, told Reuters.

A source in Israeli Prime Minister Benjamin Netanyahu's office confirmed that the IMF turned down Israel's loan request on behalf of the Palestinians. The source gave no other details.

Haaretz said Palestinian Prime Minister Salam Fayyad and Bank of Israel chief Stanley Fischer, both former IMF officials, decided Israel would ask for the bridge loan because the Palestinian Authority is not a member state and cannot receive financial support from the IMF.

Under interim peace agreements with Israel, the Palestinian Authority exercises limited self-rule in the West Bank, territory Israeli forces occupied in a 1967 war.

The IMF's representative office for the West Bank and Gaza Strip did not provide an immediate comment. Fayyad's office was not immediately available for comment. A spokesperson for the Bank of Israel declined to comment.

A brief report by the IMF on the economic situation in May described the Palestinian Authority's fiscal crisis as "very challenging" and said foreign aid to the PA was "far less than needed to finance the deficit" of around $1.3bn in 2012.

Comments
  • faerrab - 2012-07-02 13:20

    Did'nt JP morgan lose more than $ 2b llion last month alone ? Can't the IMF doante the money instead funding $5 billion worth of weapons to Israel annually ?

      jaba.kov - 2012-07-02 15:03

      Israel gets nothing for free! The chip/technology in your DSTV decoder, Apple I-phone, Blackberry, Nokia, Bank ATM etc etc... your Microsoft software or Inside Intel; from DELL to IBM, from Facebook to Google; the fruit and vegetables you purchase at Pick n' Pay, Woollies, Checkers etc all use Israeli irrigation on the South African respective farms… and I am not even going to start with the biogenetics and Medical fields that Israel leads with - this is where Israel gets its defence budget from - not as charity for anyone. The American further give specific Israeli hi-tech firms 3 billion to research and develop new innovations for both the American and Israeli defence forces, in fact the 3 billion Israel gets from the US later creates more American jobs as the Israeli innovation are manufactured back in the US… The Egyptian Army receive 2 billion from the US, however this is in a form of charity only, as no research and development is done in Egypt on behalf of the Americans.

  • ant.aloy - 2012-07-03 00:00

    Resolution 478 (1980) of 20 August 1980 The Security Council, recalling its resolution 476 (1980); reaffirming again that the acquisition of territory by force is inadmissible; deeply concerned over the enactment of a "basic law" in the Israeli Knesset proclaiming a change in the character and status of the Holy City of Jerusalem, with its implications for peace and security; noting that Israel has not complied with resolution 476 (1980); reaffirming its determination to examine practical ways and means, in accordance with the relevant provisions of the Charter of the United Nations, to secure the full implementation of its resolution 476 (1980), in the event of non-compliance by Israel ; Censures in the strongest terms the enactment by Israel of the "basic law" on Jerusalem and the refusal to comply with relevant Security Council resolutions; http://unispal.un.org/UNISPAL.NSF/0/DDE590C6FF232007852560DF0065FDDB

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