EU grants Palestinians $145 million in aid
(AP)
Updated: 2006-02-28 10:21

The European Union agreed Monday to grant $145 million in urgent aid to the Palestinians before a government led by the Islamic militant group Hamas takes power, a move aimed at preventing a financial collapse that could add to the chaos in the Middle East.

Palestinian girls wearing green scarves hold copies of Quran, during a campaign rally for the students' council elections at the Arab American university in the northern West Bank town of Jenin Monday, Feb. 27, 2006. The elections are scheduled for Tuesday. The European Union agreed Monday to provide euro120 million (US$143 million) in urgent aid for Palestinians before the Hamas led government takes office, a group the bloc considers a terrorist organization. [AP]

But the EU kept silent on what it would do once Hamas assumes control of the Palestinian government.

French Foreign Minister Philippe Douste-Blazy said the aid was required to avoid "economic chaos" from paralyzing the Palestinian Authority. It was also designed to show European support for the Palestinians remains undiminished at least until Hamas establishes its control.

The EU's decision was welcomed by the U.S. State Department.

"It is a sign that we are all working together," spokesman Adam Ereli said in Washington. "We are all working together to prevent a collapse of the interim (Palestinian Authority) government and to support the Palestinian people."

Secretary of State Condoleezza Rice talked to senior EU officials Sunday, he said.

The Bush administration, which is not providing assistance to the Palestinian Authority this year, is due to announce shortly whether it will contribute to Palestinian projects.

Both the European Union and the United States have ruled out assistance to a Hamas-led government, which will succeed the interim government under Palestinian President Mahmoud Abbas, Ereli said.

Hamas, which both the United States and the EU consider a terrorist organization, won a surprise victory in the Jan. 25 elections and has already taken control of the Palestinian parliament. Abbas has asked the group to form the next government.

Washington is seeking support from Arab allies such as Saudi Arabia and Egypt for a financial boycott of Hamas. Rice, however, found little backing for that idea on a tour of the region last week.

There is concern the Palestinian Authority will collapse without international aid and that Iran could fill any funding gap, further radicalizing the Palestinians and reducing Western influence.

For its part, the EU is taking a wait-and-see attitude.

"We need to have some patience now" to allow for government formation talks, said EU External Relations Commissioner Benita Ferrero-Waldner. "Later on, we'll have to decide what comes next."

Austrian Foreign Minister Ursula Plassnik, whose country now holds the EU presidency, said the $145 million in aid will not change the EU demand that Hamas must "accept the principles of nonviolence, recognize Israel's right to exist" and honor existing accords that the Palestinians and Israel have reached over the years.

Officials said the emergency EU aid package designed to tide the Palestinian Authority over comprises:

$48 million to pay for the Authority's energy and other essential utility bills. These bills will be paid by the EU directly to the utilities, based on invoices validated by an international audit firm.

$76 million for health and education projects to be paid to the United Nations Relief and Works Agency, which provides education, health care, social services and emergency aid for Palestinians in the Gaza Strip and the West Bank.

$21 million for salaries of Palestinian Authority workers. This money will come from $83 million the EU paid into a World Bank trust fund in 2005, only half of which was spent as the Palestinian Authority missed key good governance goals last year.

German Foreign Minister Frank-Walter Steinmeier said the EU aid package shows "Europe supports Palestinian President Mahmoud Abbas and the Palestinian Authority."

Sami Abu Zuhri, a Hamas spokesman in the Gaza Strip, welcomed the gesture. He said it showed the failure of "American-Israeli efforts to tighten the economic siege on the Palestinians and the incoming government."

"We consider the EU decision to resume transferring the funds as a step in the right direction," he said. "We in Hamas welcome any foreign aid as long as it's not conditional money."

Ferrero-Waldner said emergency aid was urgently needed after Israel's decision to withhold $50 million a month in tax funds following Hamas' victory. She urged other donors, especially Arab nations, to step forward.

The EU is considering diverting aid from a Hamas-led government to the office of the more moderate president, Abbas. But there are fears this may trigger a backlash from voters who overwhelming rejected Abbas' Fatah movement.

Abbas said Saturday he will resign if peace talks with Israel remain stalled but he urged the international community to give Hamas a chance.