EU releases aid to prevent Palestinian administration collapse

27.02.06 @ 16:04

  1. By Mark Beunderman

EU external affairs commissioner Benita Ferrero-Waldner on Monday (27 February) announced a €120 million aid package to the Palestinians in order to avoid a breakdown of the Palestinian administration.

"Today I will announce a very substantial package of assistance to meet basic needs," the commissioner said ahead of an EU foreign ministers meeting according to agency reports.

The package would include €40 million to pay the Palestinian authority's electricity bills.

"In effect we will pay electricity bills for them, direct to the utilities concerned, including in Israel," the commissioner said.

Humanitarian aid worth €64 million will be channelled through UN agencies for Palestinian refugees, she added.

Another €17.5 million will be used to pay the salaries of the Palestinian administration, constituting the only part of the package paid directly to the Palestinian Authority.

The EU's move comes after last month's election victory of radical islamist movement Hamas, which is on the EU's list of terrorist organisations.

European diplomats earlier indicated that despite Hamas' victory, an immediate withdrawal of EU funding was not an option, as this would mean a break-down of the Palestinian administration, which is feared would be followed by chaos and fresh violence.

The 25-member bloc is awaiting Palestinian coalition-building efforts, which officials say could last as long as three months.

The EU is the largest international donor to the Palestinians, with aid amounting to €500m a year.

International Middle East envoy James Wolfensohn warned that without emergency funds, the Palestinian Authority would face financial collapse within two weeks now that Israel has cut off tax transfers, according to Reuters.

"If the freeze on Israeli transfers continues, there will continue to be a significant shortfall in the Palestinian finances,'' Ms Ferrero-Waldner said.