In what may be an unprecedented move, Sweden is considering cutting financial aid to the Palestinians by about 30 percent.

As punishment for Palestinian intransigence to peace with Israel, Sweden could withhold SEK 200 million (approximately 30.5 million USD) on social development and infrastructure projects including electricity and water. Stockholm normally provides 700 million SEK (106.9 million USD) annually in aid to the Palestinians.

Swedish Minister for International Development Gunilla Carlsson explained on her official Twitter page that Swedish aid to Palestinians is not unconditional and would be reduced unless real progress was achieved with Israel.

Stockholm supports a Palestinian state but rejects unilateral actions including seeking recognition as an independent state in the United Nations and avoiding bilateral negotiations.

Minister Carlsson justified the reduction of Palestinian aid in order to protect the interests of the Swedish taxpayer. The Swedish newspaper, The Local, reported Carlsson saying, “I don’t want to haggle with Swedish aid money, but I can only take the perspective of the Swedish taxpayer. One wants results. And if there are no chances of results, then we must take the consequences of that.”

Not everyone in Sweden’s coalition government agrees with this proposal. Sweden’s Social Democrats and the Left Party, both of whom advocated that Stockholm and the EU recognize Palestine as an independent UN member-state, insist that withholding funds are collective punishment against the Palestinians.

Social Democrats spokesperson Ken Forslund said “to drop the Palestinians in the way that the government is now considering doing is wrong,” while the Left Party’s spokesperson Hans Linde called Carlsson’s suggestion “absolutely the wrong way to go” and proposed increasing assistance to the Palestinians.

Sweden’s stance appears at odds with the generic EU position which tends to focus on criticizing Israel’s settlement policy in the West Bank and placing most of the onus for failed peace talks on Israel. Sweden’s stance also deviates drastically from its Scandinavian neighbor Norway, described by one author as the most anti-Semitic country in the West.

In May, in response to a fatal police shooting of an elderly man wielding a machete in his home, immigrant communities predominately from Iraq, Afghanistan and East Africa rioted in the streets of Stockholm for six days, torching a school, cars and attacking law enforcement. Does Sweden’s decision coincide with the recent Muslim riots in Stockholm?

Michael Sharnoff is founder and editor of Sharnoff’s Global Views. For instant updates and breaking news, join our global community on Facebook and Twitter.