No salaries before Eid: Gaza banks fold as treasuries run dry

Date: 06 / 12 / 2008  Time:  10:23
Gaza – Ma’an –

Because of the brutal Israeli siege of Gaza Strip, the 1,000 Israeli shekels promised to Gaza Strip government workers will not be paid out by some banks before the Islamic holiday of Eid Al-Adha, according to bank employees who were told not to go to work on Saturday.

Several bankers told Ma'an that they received phone calls on Friday evening from bank managers telling them not to head to work on Saturday morning as there is no cash left in banks' treasuries to distribute.

The news also means civil servants' salaries in the Gaza Strip can only be paid after Eid Al-Adha, which begins this week.

Bank managers made a collective decision to shut down operations after they determined they would not be able to pay even half of the Gaza Strip's workers the 1,000 shekels promised on Friday, which itself is only a fraction of monthly salaries.

Thousands of civil servants headed to banks Saturday morning to collect the 1,000 shekels that was reportedly to be distributed on Saturday, according to multiple media outlets, including Ma'an.

The Palestinian Monetary Authority (PMA) will meet with world financial and development institutions on Saturday to discuss exerting pressure on Israel to allow currency into Gaza so government employees can be paid.

The PMA announced an upcoming meeting with the International Monetary Fund, the World Bank, several donor countries and representatives of the Middle East Quartet at the World Bank's office in Jerusalem, after which a joint press conference will be held.

As late as Friday night Israeli officials refused the request of all parties to have cash transferred into Gaza, of which banks are facing such a crisis that they will be unable to pay government workers’ salaries in full, despite there being enough money in Palestinian Authority (PA) accounts.

Earlier on Friday a de facto government official announced that what remains of bank reserves would be distributed to government employees in the amount of 1,000 shekels per person on Saturday.

While the planned payments would have only been a fraction of the salaries due to public servants, there was not enough paper money in the Gaza banks to cover the full amount.

Palestinian Prime Minister Salam Fayyad confirmed that there is a severe shortage of Israeli currency in the Gaza Strip and said that, collectively, the Strip’s banks only have 47 million shekels in cash.

According to Fayyad, Gaza needs 100 million shekels monthly to ensure salaries are paid to employees. Israel allowed the transfer of 50 million shekels to Gaza at the end of September. In August, two transfers of 72 million shekels and 40 million shekels arrived from Israel at the beginning of the month.

Gaza banks shut down on Thursday due to the currency shortage, but indicated that they would make every possible effort to coordinate with the PMA so partial salaries could be paid before Eid Al-Adha on 8 December, efforts that were apparently in vain.


***Updated 11:46 Bethlehem time