The European Union threw the Palestinians a short-term aid
lifeline Monday to help stave off imminent financial collapse,
despite the appointment of a leader of the Islamist militant group
Hamas as prime minister.
But the 25-nation bloc made sure most of the € 120 million
(US$142 million) would bypass the Palestinian Authority in a move
to sharpen pressure on Hamas to moderate its radical policies when
it takes over government responsibility.
"Today I will announce a very substantial package of assistance
to meet basic needs," European External Relations Commissioner
Benita Ferrero-Waldner said as EU foreign ministers met to discuss
how to respond to the impending formation of a government by Hamas,
which does not recognize Israel's right to exist and espouses armed
struggle.
The package included € 40 million (US$48 million) to pay energy
bills and € 64 million (US$77 million) channeled through the UN
Relief and Works Agency for Palestinian refugees (UNRWA). But only
€ 17.5 million (US$21 million) would go to the PA to help pay
salaries, if ministers give the green light as expected.
"In effect we will pay electricity bills for them, direct to the
utilities concerned, including in Israel," she said.
International envoy James Wolfensohn warned in a confidential
letter that without emergency funds, the Palestinian Authority
faced financial collapse within two weeks now that Israel has cut
off tax transfers.
The EU is the largest donor to the Palestinians, but its funding
has been thrown into doubt by the ascendancy of Hamas, which the
25-nation bloc lists as a banned terrorist group.
Israel has stopped monthly transfer of US$50-55 million in tax
payments to the Palestinians, and the United States has demanded
the return of US$50 million in aid to prevent it falling into
Hamas' hands.
Wolfensohn said that even if the authority survived with
emergency funding, the financial crisis could bring violence and
chaos unless the Quartet of international mediators the United
States, the EU, Russia and the United Nations developed a long-term
funding plan once a Hamas-led government is in place.
(China Daily February 28, 2006)
