The European Union will release financial aid to the Palestinians to avert a looming crisis, despite the recent appointment of a Hamas leader as Palestinian prime minister.
"Today I will announce a very substantial package of assistance to meet basic needs," European external relations commissioner Benita Ferrero-Waldner told reporters on Monday.
Ferrero-Waldner was speaking as EU foreign ministers gathered for talks in Brussels on how to respond to the impending formation of a Palestinian government by Hamas, which has refused so far to renounce violence and recognise Israel’s right to exist.
The aid package would total 120 million euros, including 40 million euros to pay electricity bills and 64 million euros for health and education.
It will also include monies to pay Palestinian government salaries, to be channelled through the United Nations Relief and Works Agency for Palestinian refugees (UNWRA), Ferrero-Waldner said.
Direct payments
"In effect the EU will pay electricity bills for them, direct to the utilities concerned, including in Israel, and not to the Palestinian Authority," Emma Udwin, the Commissioner’s spokeswoman told EJP.
She insisted that the aid will be released before the new Hamas-led Palestinian government is formed.
Hamas won a large victory in Palestinian elections last month and the Islamist group’s leader Ismail Haniyeh has been named to lead the next Palestinian government.
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Ismail Haniyeh (L) with Palestinian President Mahmoud Abbas
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“EU money will reduce the pressure on the caretaker government so that President Mahmoud Abbas can continue the important task of building the next government,” Ferrero-Waldner said.
The aid package is proof of the EU’s "full support" for Palestinian President Mahmoud Abbas as he struggles to convince Hamas to renounce violence and recognise Israel, she added.
The EU is the largest donor to the Palestinian Authority with a yearly average 500 million euros in aid to the Palestinians every year. The funds are either channelled through non-governmental organizations, the United Nations or the World Bank.
A Hamas leader on Monday welcomed the European Union decision.
Speaking to the German news agency dpa, Syria-based Mousa Abu- Marzouk described the decision as a "good step in the right direction" and called on Europe to deal with Palestinian people in a "civilized democratic way."
He confirmed that Hamas "is ready to negotiate" with the international community about all aspects pertaining to continuing the Mideast peace process but reiterated the group’s rejection of recognizing Israel.
Officials in the US State Department expressed support for the European Union decision to transfer the aid to the Palestinian Authority, explaining there is no problem with the current transition government.
American officials are stating that once the Hamas-led administration takes office, the entire situation will be reevaluated.
Israeli funds stopped
The EU move comes after Israel stopped the monthly transfer of millions in tax payments to the Palestinians and US officials warned that Washington could cut off funding.
"The Palestinian Authority cannot achieve balance in its finances without outside help," Ferrero-Waldner said, calling on others, especially Arab countries, to do more to fund it.
She noted that even when Israel transferred the tax revenues which it collects on behalf of the Palestinians, the Authority still runs a deficit.
The EU commission has also decided to unblock 17.5 million euros frozen in a World Bank-administered trust fund. The EU originally paid 70 million euros into this, of which 35 million was disbursed but the remainder stopped over the Palestinian Authority’s failure to meet certain financial benchmarks.
The 17.5 million euros will be used to pay salaries and is the only part of the new aid package to be paid directly to the Palestinian Authority, the Commissioner spokeswoman told EJP.
The spokeswoman said that due to the sensitivity of the topic, this part of the aid will be submitted to the EU foreign ministers. According to diplomatic sources, France is supporting the EU’s commission drive to unfreeze the money but is likely to find fierce opposition among other EU member states.
French foreign minister Philippe Douste-Blazy stressed the aid was required to avoid "economic chaos" from paralyzing the Palestinian Authority.
The EU - along with the US - has underlined repeatedly that it will only have dealings with Hamas if it recognises Israel, renounces violence and abides by past peace moves made by the Palestinian Authority.
