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EU reviews Palestinian request to release funds

February 25, 2015 at 10:45 am

The European Union is reviewing a Palestinian Authority request to activate the revolving fund agreement to solve its financial crisis, the Anadolu Agency reported.

In remarks to the news agency yesterday, the EU representative in the Palestinian territories said that there has been no response to the Palestinian request, adding that the EU provides assistance to the Palestinians is through the PEGASE mechanism.

The revolving fund agreement was signed in 1995 between the Palestinian Authority and the European Union.

The agreement provides that the EU pays the Palestinian Authority the tax revenues withheld by Israel as a loan without interest, on the condition that the PA returns the money as soon as Israel releases it.

Meanwhile, under the PEGASE mechanism, the EU provides to the Palestinian Authority nearly €300 million annually in the form of budget assistance or to implement projects in the Palestinian territories.

A member of Fatah Central Committee and its Foreign Relations Commissioner, Nabil Shaath said that President Mahmoud Abbas has recently asked the EU High Representative for Foreign Affairs Federica Mogherini to re-activate the revolving fund agreement.

In telephone remarks to the Anadolu Agency, Shaath pointed out that the agreement was activated twice in the past, the first time in 1995 and the second time from 1998 to 2001.

Earlier this year Israel withheld Palestinian tax revenues to punish the Palestinian Authority for applying to join the International Criminal Court in The Hague.

Israeli TV said the government decided yesterday to freeze the transfer of Palestinian tax funds for a third consecutive month.