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| EU freezes financial aid to Palestinians
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Benita Ferrero-Waldner, EU Commissioner for external relations & neighbourhood policy
Photo: The European Commission
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The European Union has suspended 35 million euros in aid to the Palestinians, citing their lack of budgetary discipline, the EU’s commissioner for external relations said during a visit to the region.
The sanction underscored intensified foreign donor scrutiny on the Palestinian Authority since Israel’s pullout from the Gaza Strip last August.
Visiting the region on Tuesday ahead of Palestinian legislative elections on 25 January, Benita Ferrero-Waldner said half of 70 million euros donated through the World Bank in November has not been released, and that the issue was under discussion.
"The biggest donor is the European Commission, and we have not paid because the benchmarks have not been fulfilled. There has to be a credible finance minister, but there also has to be a budget and the budget should also remain within the limits of what the budget has foreseen,” the commissioner told reporters.
"We have a long-term commitment with the Palestinian people that we would like to improve their living conditions (but) we are not only pumping money into the Palestinians without asking for very clear benchmarks,” Ferrero-Waldner added.
“The World Bank has specific conditions that the Palestinian Authority didn’t abide by, so the bank stopped its aids for the budget and the EU provides aids to the PA budget through the bank,” she said.
Improving Palestinian governance
The Palestinian Authority did not comment on the decision.
There has been no replacement appointed for Salam Fayyad, who quit as Palestinian finance minister in November to run for parliament.
Before resigning, Fayyad predicted aid from a World Bank trust fund would be cut in response to ballooning Palestinian government wage costs.
The Palestinian economy has withered since the start of an uprising against Israel in the occupied West Bank and Gaza in 2000, hampered by violence and by mismanagement and corruption that discourage donors.
The World Bank has said that reviving the Palestinian economy is crucial to peace.
But Ferrero-Waldner, who said European aid to the Palestinians had previously been held up in 2002 and 2003, said such donations could not be unconditional.
“Effective, functioning, democratic Palestinian institutions are essential for the peace process. Without them we cannot lay the foundations for a viable Palestinian state living in peace with Israel,” Ferrero-Waldner told a press conference on Tuesday in Jerusalem.
“Improving democracy, accountability and efficiency in Palestinian governance is in everyone’s interests,” she added.
She announced however an aid supplement of 1,4 million euros to support the January 25 legislative elections, bringing the EU’s total aid to 18,5 million euros.
New efforts for peace
The EU is currently coordinating its largest election observation mission, committing 237 observers to the region but has warned this could end if radicals win the election.
Speaking about this vote and the upcoming Israeli elections on 28 March, Ferrero-Waldner said: “We hope these elections will bring two leaderships ready and able to inject new vigour into the peace process. The vast majority of Israelis and Palestinians are tired of conflict and insecurity.”
Israel has last Sunday allowed Palestinians in East Jerusalem to participate in the 25 January elections.
Commenting on EU’s decision to freeze part of the financial aid to the Palestinians, Sagi Karni, counsellor at Israel’s mission to the EU in Brussels, told EJP : “This is line with Javier Solana’s statements last month. If Hamas will be part of the Palestinian government and will not disarm, it will be difficult for the EU to finance the Palestinian Authority.” “On top of that, the security is deteriorating in the Palestinian territory and it’s difficult for investors to carry out projects there when there is anarchy,” he added.
Last December, EU top foreign policy official Javier Solana threatened to freeze European aid to the Palestinian authority if Hamas wins this month’s poll.
“It is very difficult that parties that do not condemn violence without changing these positions can be partners for the future,” he added. “The taxpayers in the EU, members of the parliament of the EU, will not be in a position to sustain that type of political activity,” Solana told journalists.
During her trip, Ferrero-Waldner met with the PA’s foreign minister Nasser al-Kidwa and Israeli acting prime minister Ehud Olmert.
Olmert declared Tuesday that he hopes to reopen peace talks with the Palestinians after the elections.
In his first policy statement since taking the helm after Ariel Sharon’s stroke earlier this month, Olmert also hinted that Palestinians in Jerusalem might not always be under Israeli rule.
“I hope that after the 25 January Palestinian elections results are in, and after our election results are in, that I will able to enter into negotiations with Mahmoud Abbas ... on a final status agreement between us and the Palestinians," Olmert said at a press conference.
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