DEMARCHE REQUEST: KEEPING THE PA AFLOAT

C O N F I D E N T I A L CAIRO 001480 SIPDIS NEA/IPA FOR SACHAR E.O. 12958: DECL: 07/14/2018 TAGS: PGOV KPAL PREL ECON KWBG EG SUBJECT: DEMARCHE REQUEST: KEEPING THE PA AFLOAT REF: SECSTATE 71463 Classified By: MINISTER-COUNSELOR WILLIAM R. STEWART REASONS: 1.4 (B) and (D) ¶1. (C) We raised points in reftel with Barakat Leithy, MFA Acting Director of Palestinian Affairs, on July 13. Leithy told us that the GOE strongly supports the Palestinian Authority and recognizes its financial challenges. Egypt is also facing increasing budgetary pressures. Nevertheless, Leithy said that the GOE is trying to help ease the PA's financial burden in two ways. First, the Egyptians have provided USD 15.8 million to an Arab League fund to pay for Palestinian medical bills incurred in Egyptian hospitals. Leithy said his understanding was that the Arab League would transfer these funds to the PA. Second, Leithy said there is currently a discussion with the MFA, Ministry of Finance, and others GOE agencies to activate a mechanism to help the PA with its 66 million Egyptian pound (approximately USD 13 million) bill owed to the GOE for provision of electricity to Gaza. (Note: The GOE assisted the PA with payment of this utility bill routinely in the past. End Note). ¶2. (C) We also raised reftel message with Arab League Chief of Staff Hisham Yousef on July 13. We reviewed with him the status of Arab contributions, and stressed the urgency of the PA's budget situation. Yousef took note of the Arab states that are delinquent, and agreed that Arab states should follow through with their pledges. SCOBEY