EU to help Palestinians avoid penury

The European Union will seek ways to fund the Palestinian Authority when EU foreign ministers meet on Monday, to prevent its financial collapse now Israel is withholding PA tax revenue, EU officials said.

    The Hamas victory has brought about a financial crisis

    "It is not in our interest to see the Palestinian Authority break down, especially when the Israelis have stopped disbursing customs duties," a senior EU diplomat said on Friday.
       
    The Palestinian Authority is dependent on foreign aid and on tax revenues collected by Israel on its behalf to pay its 140,000 employees and keep its ministries and institutions functioning.
       
    But the victory of the Islamist group Hamas in parliamentary elections last month has thrown the Authority's future funding into doubt.
       
    Israel has decided to stop handing over the tax revenues it collects on behalf of the Palestinian Authority, worth $50 to $55 million a month, because Hamas remains committed by its charter to the destruction of the Jewish state.
       
    The EU, the Palestinian Authority's largest donor, cannot deal directly with Hamas because it has placed the group on its list of banned terrorist organisations. 

    Growing deficit
       
    "The situation is pressing, the financing gap is very serious", a European Commission official said, adding that PA already had a budget deficit of around $70 million a month before Israel decided to withhold its tax revenues.
       
    "Discussions are going on with other donors in the World Bank" over $60 million that remains in a budgetary assistance trust fund which was suspended last year, the Commission official said.
     
    Foreign ministers are also expected to discuss longer-term aid to the Palestinians, an EU official said. "Several ideas are circulating on how to channel aid towards (Palestinian President) Mahmoud Abbas, for instance," the official said.
       
    The EU will continue to give aid to the Palestinians until the new Hamas-led government is formed, but will make further aid conditional on a commitment by the new government to recognise Israel and renounce violence, a senior EU diplomat said.
       
    The European Union gave the Palestinians 500 million euros ($595 million) in aid last year.
       
    UN Middle East envoy Alvaro de Soto is also appealing for funds for the Palestinian Authority, warning that an abrupt cut-off of aid could lead to its collapse, and will brief the Security Council on Tuesday. 

    SOURCE: Reuters


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