Brussels, 24/01/2003 (Agence Europe) - CDU member Armin Laschet states in a press release that, after the clear and detailed explanations from Commissioner Chris Patten to his questions on the use of EU monthly budgetary assistance to Palestine, he would not sign the proposal to set up a committee of inquiry. He went on to add that he and Markus Ferber (CSU), are, on the other hand, insisting on their proposal to form a working group composed of members of the Committees on Foreign Affairs, the Budget and Budgetary Control. Mr Patten, moreover, has said the European Commission would give its "full support" for such a working group. The group, Mr Laschet went on to say, will regularly assess all information on direct aid to the Palestinian budget, and thus successfully control the use of EU contributions.
In a letter dated 21 January addressed to Mr Laschet, Mr Patten gives his assurance that the Commission would never agree to EU funds falling into terrorist hands. The Commission, he says, has examined "all the documents made available by the Israeli authorities. So far, we have found no proof that EU funds have been deflected by the Palestinian Authority (…) However, we cannot be complacent". Mr Patten recalls that the Commission, like the European Council, remains convinced that the deepening of the Palestinian Authority's reform and improvements in its financial management and its audit capacities is the best preventive strategy against eventual abuse or cases of corruption and that the reform of financial management of the Palestinian Authority is a key objective among several conditions to which EU budgetary support is linked.
In his reply to Mr Laschet, Mr Patten mainly specifies that it is not exact that only 55-66% of the amounts the PA states it needs for salaries were effectively used for this. The emergency plan developed for 2002 by the Palestinians, in collaboration with the International Monetary Fund (IMF), provides for current monthly spending of a maximum of $90 million, of which 58 million at most goes for salaries; and, from January to October 2002, on a monthly basis, 52 million were paid out for salaries. In addition, there is constant monitoring of implementation of the PA budget by the IMF, and it is therefore "virtually impossible for the AP to be able to maintain a shadow budget founded on a double accounting system". According to IMF information, he continued, a tax for belonging to Al Fatah is paid solely by the Fatah members and, at any rate, "it is inconceivable that the Commission should intervene in the decision of any individual on the way his/her salary should be spent" (Mr Laschet asked whether such a tax, from 1.5 to 2%, was applied compulsorily to salaries paid by the EU to employees of the PA); - none of the documents provided by the Israeli government proves that persons suspected of assassinating Techiya Bloomber and of carrying out the Barmitzvah attack were in the pay of the PA. Mr Patten adds that international donors cannot each control the 124 609 names of PA employees, but that the IMF monitors the evolution of this list of employees. The IMF gives very detailed information to the European Commission each month, including on how the PA meets the EU's conditions for financial transparency, judicial reform, etc. (Mr Patten forwarded a letter to Mr Laschet from the IMF in November 2002, hoping that this information would finally clarify all the confusion that could have proved lasting. The new Palestinian Finance Minister, Salam Fayyad, controls the profits of the Palestinian Petroleum Corporation (Mr Laschet wished to know whether the profits of tobacco and crude oil monopolies controlled by the AP were channelled directly towards President Arafat). Furthermore, an audit of all the PA's commercial investments is conducted by Standard & Poor's, which is to report mid-February. The Commission has regular contacts with AMAN ("Coalition for accountability and integrity" which makes up the Palestinian branch of Transparency International). EU experts will contribute to strengthening internal audit functions of the Palestinian Finance Ministry, and an EU expert mission will be discussing, from this week on, the training of around 200 audit experts (Mr Laschet asked whether it were true that the Commission cannot really know exactly what it is financing with its aid … and that the real problem is not only what is in the PA budget, but what is not there).
By way of conclusion, Mr Patten recalls that EU budgetary aid to the PA was justified by the fact that Israel keeps Palestinian tax receipts at a level of approximately $30 million per month. He said that, in this context, it was necessary to preserve the PA's administrative structures while using EU assistance to promote reform and to improve management. It is also quite clear, he said, that, as soon as the Israeli authorities resume their payments on a stable and regular basis, the EU would seek to gradually reach more targeted financial aid forms.