| EU offers rescue package to palestinian authority { February 27 2006 } Original Source Link: (May no longer be active) http://news.ft.com/cms/s/b40ac200-a782-11da-85bc-0000779e2340.htmlhttp://news.ft.com/cms/s/b40ac200-a782-11da-85bc-0000779e2340.html
EU offers rescue package to Palestinian Authority By Daniel Dombey in Brussels Published: February 27 2006 11:27 | Last updated: February 27 2006 11:27
The European Union plans to provide the Palestinian people with over €120m in aid before the new Hamas government takes office, Benita Ferrero-Waldner, EU Commissioner for external relations said on Monday.
The announcement was made as EU foreign ministers met in Brussels ahead of a scheduled consultation on Wednesday by the EU and its fellow members of the international Quartet – the US, United Nations and Russia – on how to avert the imminent financial collapse of the Palestinian Authority even before the incoming Hamas-led government.
The European stance contrasts sharply with the US, which has called for the PA to hand back $50m in donations, and Israel, which has cut off transfers to the PA of $50m a month.
It prefigures an intense debate within the international community over contacts with and funding for a PA led by Hamas, which the EU, the US and Israel classify as a terrorist group.
Last month, the US, the EU, Russia and the UN agreed international support should be provided for the caretaker PA administration, but called on Hamas to recognise Israel and renounce violence.
Ms Ferrero-Waldner, who is responsible for much of the EU’s foreign aid budget, said she wanted to provide the Palestinians €40m to help pay energy bills - enough for two months supply - as well as €64m for the UN Relief and Works Agency for Palestine Refugees.
In addition, she believes the Commission should release half of a €35m payment to the PA frozen in December because of its failure to meet benchmarks to put its finances in order.
The Commissioner said she had received written assurances from the PA’s minister of finance that the money would be spent before Hamas took power.
“I think it is essential that this money is fully spent by the time the new government comes in,” she said.
With Hamas as much as a month away from forming a cabinet, the outgoing PA government faces a deficit of up to $370m (€312m, £212m) for February and March if all its outstanding obligations are taken into account. That would include it meeting a request from the US to return $50m of infrastructure aid.
PA officials have warned international donors they need $60m-$80m this week if they are to begin paying public sector salaries that directly and indirectly support about 1m Palestinians.
The PA on Sunday faced the threat of an immediate suspension of fuel shipments to the Gaza Strip and West bank after failing to meet a payment of more than $30m to Dor, the Israeli monopoly supplier to the territories.
Additional reporting by Harvey Morris in Jerusalem
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