Ukraine in Talks with EU to Maximize Electricity Imports, Minister Says 

German's Foreign Minister Annalena Baerbock speaks to Ukrainian minister of energy German Galushchenko during official visit to a thermal power plant which was destroyed by a Russian rocket attack in Ukraine, Monday, May 21, 2024. (AP)
German's Foreign Minister Annalena Baerbock speaks to Ukrainian minister of energy German Galushchenko during official visit to a thermal power plant which was destroyed by a Russian rocket attack in Ukraine, Monday, May 21, 2024. (AP)
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Ukraine in Talks with EU to Maximize Electricity Imports, Minister Says 

German's Foreign Minister Annalena Baerbock speaks to Ukrainian minister of energy German Galushchenko during official visit to a thermal power plant which was destroyed by a Russian rocket attack in Ukraine, Monday, May 21, 2024. (AP)
German's Foreign Minister Annalena Baerbock speaks to Ukrainian minister of energy German Galushchenko during official visit to a thermal power plant which was destroyed by a Russian rocket attack in Ukraine, Monday, May 21, 2024. (AP)

Ukraine is negotiating to maximize possible imports of electricity from European Union countries to compensate for the generation capacity destroyed by the Russian attacks, Ukrainian energy minister said on Friday.

Russian missile and drone attacks on Ukraine's energy sector have intensified since March, resulting in significant damage and blackouts in many regions.

The attacks have caused more than $1 billion of damage to the sector, leading to the loss of 8,000 MWh of generating capacity from the energy system, the government says.

Currently, Ukraine can import from the EU states no more than 1,700 Mwh of electricity simultaneously.

"We're negotiating. Our task is to maximize this figure," Energy Minister German Galushchenko told parliament.

"Technically, we can receive (import) more than 2,000 Mwh, even 2,400 Mwh. I'm sure a decision will be made," he added.

Volodymyr Kudrytskiy, the head of Ukraine's national power grid operator Ukrenergo, told Ukraine's Telegraf that 1,700 Mwh is "the ceiling for now".

"Everything will depend on how quickly our European colleagues - energy system operators of neighboring countries - will be able to implement projects to expand the capacity of their grids," Kudrytskiy said.

He said that European grid companies need time and money to reinforce some of their substations, install additional transformers or build new transmission lines.

"We think 3,500 to 4,000 Mwh of interstate interconnector capacity is something we can have in the horizon of five years," Kudrytskiy noted.

Energy minister Galushchenko did not say exactly how much imports are being discussed now, but Maxim Timchenko, the head of Ukraine's largest private energy company, DTEK, said earlier this month that an increase to 2,200 Mwh could significantly improve the situation.

DTEK has lost about 90% of its power generation capacity due to Russian missile attacks in recent months.

DTEK data showed that Ukraine consumed around 13,000 Mwh before the attacks as of March 17 but after a series of Russian attacks on the energy system, consumption fell to 9,100 Mwh.

Due to power shortages, Ukrainian power grid operator Ukrenergo has been forced to introduce regular shutdowns of industrial consumers and households and maintain high import rates.

Problems with power generation can have a "potentially negative impact" on industry, especially the largest electricity consumers, the economy ministry said this week.



Israel’s ‘Economic War’ Chokes Occupied West Bank

Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.
Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.
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Israel’s ‘Economic War’ Chokes Occupied West Bank

Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.
Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.

Palestinian teenagers bounced on trampolines and jumped through hoops inside a towering tent on the outskirts of Ramallah, the financial hub of the occupied West Bank.

But the circus students weren't the only ones bending over backwards in the pavilion: the school's director faced financial hurdles to buy the tent from Europe and trampolines from Asia.

"We are suffering with international payments," said Mohamad Rabah, head of the Palestinian Circus School, describing a bureaucratic process that could delay equipment delivery by up to a month.

Banking in the Palestinian territories is challenging, with the Palestinian Authority (PA) under scrutiny for potential terror financing, hindering transactions.

Israel has occupied the West Bank since 1967, with strong economic ties allowing two Israeli lenders to serve as correspondent banks in the Palestinian territory.

But this may change if Israel's far-right Finance Minister Bezalel Smotrich carries out threats to sever a vital banking route next month.

Since Hamas's October 7 attack triggered the Gaza war, Israel has imposed economic curbs on the PA, withholding tax revenues it collects on its behalf.

Smotrich said this week he had redirected $35 million in PA tax revenues to families of "terrorism" victims, a move condemned by the United States.

After three European countries recognized Palestinian statehood in May, Smotrich told Prime Minister Benjamin Netanyahu he would not extend indemnity to banks that transfer the funds from the end of June.

Israel's Bank Hapoalim and Israel Discount Bank need protection, expiring on July 1, to avoid sanctions for dealing with Palestinian lenders.

Israel's central bank and finance ministry declined to comment when contacted by AFP.

A Palestinian fruit vendor arranges his street cart in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024. (AFP)

- 'Humanitarian crisis' -

The banking channel used to pay for West Bank imports -- including essential goods like water, fuel and food -- handles $8 billion yearly.

Palestinian businesses receive nearly $1.7 billion annually for exports, according to the Palestine Monetary Authority.

"For us, because our economy is dependent on the Israeli economy, because Israel is controlling the border, the impact will be high," said PMA governor Feras Milhem.

The Palestinian economy is largely governed by the 1994 Paris Protocol, which granted sole control over the territories' borders to Israel, including the right to collect import duties and value-added tax for the PA.

Palestinian livelihoods have also been hurt by bans on laborers crossing into Israel and by a sharp downturn in tourism in the territory, including a quiet Christmas season in Bethlehem.

The United States has urged Israel to improve conditions, warning that severing the banking route would have a dire impact on the West Bank economy.

"I believe it would create a humanitarian crisis in due course if Palestinian banks are cut off from Israeli correspondence," US Treasury Secretary Janet Yellen said last month.

Western governments fear Israel's economic policies could destabilize the West Bank.

"The banking system may collapse and therefore the PA may collapse as well," a European diplomatic source in Jerusalem told AFP on condition of anonymity.

"The PA is in a financial crisis and it could collapse before August."

A Palestinian vendor unloads his stock in front of a shop in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024. (AFP)

- Digital currency -

Palestinian businessmen say their bottom lines have been hit since October 7.

Imad Rabah, who owns a plastics company, said his net income had fallen 50 percent in one year.

Musa Shamieh, who owns a womenswear company said the Israeli policies were designed to push Palestinians to leave the West Bank.

"They want us to leave our land and they know it will be hard for us to stay if we can't do business," Shamieh said.

Israel's harsh economic policies could eventually drive Palestinian policymakers to pursue sweeping changes to the monetary system.

"We need to work on a plan B when it comes to the trade relations," said Milhem, governor of the PMA, which uses an image of the former Palestinian pound as its logo.

Yousef Daoud, professor at the West Bank's Birzeit University, said the territory could scrap the shekel as its de facto currency in favor of a digital alternative.

"We can make our e-currency, just collect all the shekels, issue an equivalent amount of Palestinian pounds, one-to-one fixed exchange rate, and have the Palestinians deal with e-currency," he said.

"Somehow, eventually, we'll get rid of the shekel."