EU to go it alone with Palestinian aid

The European Union (EU) is preparing to go it alone and channel emergency funds to the Palestinians if talks with the US, Russia and United Nations on setting up an international mechanism for easing their financial plight fail this week, senior officials indicated. Pressure for a swift agreement on supplying food and other aid directly to Palestinians as well as money to pay the salaries of health workers and teachers intensified when President Mahmoud Abbas and Ismail Haniyeh, prime minister of the Hamas-led government, failed to resolve the crisis last weekend. The US and EU suspended direct funding to the Hamas government early last month, leaving 165,000 public employees of the Palestinian Authority (PA) unpaid so far this month. According to a Brussels document, the crisis in Gaza and the West Bank could deepen in the next few months, leading to "greatly increased unemployment and poverty levels, and possibly the breakdown of law and order." The "quartet" of peace mediators–the EU, US, Russia and UN–were to discuss this week in New York plans put forward by Britain and France for the "international mechanism" to bypass both Hamas and President Abbas and provide funds and aid through bodies such as the World Bank, IMF or the UN itself. But Washington has resisted the idea of paying overdue salaries to workers in essential services such as health and education. Its tougher stance, with Israel's backing, is seen by some Palestinians as not so much an effort to change Hamas policies as to change the regime. Benita Ferrero-Waldner, EU external affairs commissioner, who was in Egypt recently, said: "We do hope there's a chance for a common agreement on this issue." She refused to set a deadline but admitted that the humanitarian crisis among Palestinians was worsening. Ferrero-Waldner confirmed that the EU, which in the past provided half the PA's aid, or $635 million a year, plans to release $43 million in humanitarian aid to be channeled through agencies, but officials suggested it could unblock other funds if the quartet talks failed. Russia is sending $10 million for Palestinian health and education, using Abbas as a conduit. The draft British proposal for the internationally administered fund said that "without sufficient revenues there is a risk the PA will not be able to deliver basic services. This could have serious consequences for living standards, political stability and the humanitarian situation." Last week, 36 aid agencies issued a joint report warning they are incapable of handling the funding crisis. The EU plan is to use the Palestinian president as a liaison point for delivering pooled funds via the World Bank or IMF to the Hamas-led PA, rather than placing it under his control. "The international mechanism would enable us to control and deliver health and education funds," Ferrero-Waldner said. On May 6 Abbas's advisers said Hamas had again refused to change its policy towards Israel, renouncing violence, recognizing the Jewish state and standing by past peace deals. The EU and US have reaffirmed that these are absolute conditions for dealing directly with the PA. Ferrero-Waldner, who sanctioned the release of $153 million in February, said a further $160 million was blocked. "There might be some salaries paid for health and education but it's not yet clear and it might have to go through the World Bank." Saying the EU was "not abandoning the Palestinians," she insisted Israel should use the international mechanism if necessary to pay withheld tax and customs revenues worth $50 million a month to the PA.