EU ministers to tackle Palestinian funding

Date: 15/02/01

By Simon Taylor

EU FOREIGN ministers will hold a debate later this month on the sensitive issue of funding for the Palestinian National Authority in order to keep it from collapsing at a crucial time in the Middle East peace process.

Diplomats say the ministers, set to meet in a closed-door session, will discuss asking the Palestinians to examine their spending priorities. The authority, which funds essential public services in the West Bank and Gaza, could run out of money in the next few months.

"There will be a discussion on the Middle East peace process at the next meeting of the General Affairs Council in which we will look at what to do about the authority," one diplomat confirmed.

External Relations Commissioner Chris Patten has warned that funding for the authority could dry up soon, dealing a major blow to hopes of a peace deal.

"Israeli security would be threatened and our efforts to promote cooperation and stability in the Middle East will be undermined," he said.

The authority is being funded by the EU, the United States, Japan and Norway after Israel stopped making transfers of tax revenues to the Palestinians during the current outbreak of violence in the region. The Bush administration this weekend urged the Israelis to resume payments to the Palestinians.

The European Commission has already spent one-third of an earmarked €90-million fund to prop up the authority but the body needs €35 million a month to survive.

Diplomats say the Union may urge the Palestinians to prioritise their spending in order to get through the months ahead. Earlier this month, Patten told the Palestinian minister for planning and international cooperation, Nabil Sha'at, that he wanted to carry out an "in-depth reassessment of support programmes" for the authority although he declined to be more specific.

Sha'at has also expressed dissatisfaction with the current situation, saying Palestine is "only surviving by a drip feed".

Officials say changes are needed in the way the authority is funded but the EU wants to avoid the perception that it is not providing sufficient support at a crucial time in the peace process.

The Union has urged new Israeli Prime Minister Ariel Sharon to resume peace talks with the Palestinians as soon as possible. Initial fears that Sharon's hard-line stance on key areas such as settlement policy and the status of Jerusalem could jeopardise hopes of an agreement have been tempered by reports that he has approached Shimon Peres, architect of the Oslo peace agreement, and former Labour leader Ehud Barak to join a government of national unity.

Sharon's overtures have raised hopes that his record as a tough military leader could help him to sell a peace deal with the Palestinians to a sceptical Israeli electorate.

EU foreign ministers are due to hold a debate on the sensitive issue of funding for the Palestinian National Authority in order to keep it from collapsing at a crucial time in the Middle East peace process.