VZCZCXRO6035
OO RUEHROV
DE RUEHJM #1584 2111442
ZNR UUUUU ZZH
O 301442Z JUL 07
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8533
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY

UNCLAS JERUSALEM 001584 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NEA FOR FRONT OFFICE; NEA/IPA FOR SHAMPAINE/BELGRADE; NSC 
FOR ABRAMS/WATERS; TREASURY FOR 
SZUBIN/LOEFFLER/NUGENT/HIRSON 
 
E.O. 12958: N/A 
TAGS: EFIN KWBG IS
SUBJECT: PA BUDGET: 100 MILLION IN THE RED, BUT ISRAELI 
ARREARS WILL MASK THE PROBLEM FOR A WHILE 
 
 
¶1. (SBU) Palestinian Authority (PA) Ministry of Finance 
officials and local IMF representatives say that the PA is 
running a monthly operating deficit of approximately USD 100 
million.  The gap is exacerbated by the loss of Gaza revenues 
(both domestic taxation and VAT/customs for goods not moving 
into Gaza due to the closure of the crossings).  Israeli 
agreement to transfer PA funds previously withheld 
(approximately USD 350 million) over the next four months 
will allow the PA to cover most of this deficit and pay full 
salaries for the time being.  Even with transfer of the 
withheld funds, the PA will be unable to make any significant 
dent in its own arears, currently estimated at just over one 
billion USD.  Once the withheld funds are fully paid out by 
the GOI, the PA will need a significant inflow of cash, as 
early as October. 
 
¶2. (SBU) PA Ministry of Finance unofficially reported the 
following figures: 
 
-- Total monthly operating expenses: USD 170 million (of 
which USD 128 million goes to salaries) 
 
-- Domestic revenues: Approximately USD 20 million/month (May 
2007: USD 18 million; June 2007: USD 20 million) 
 
-- Regular monthly clearance transfer from the GOI, after 
deductions: USD 50 - 60 million 
WALLES