Brussels, 08/06/2006 (Agence Europe) - The European Commission has practically finalised its TIM document, which will form the basis for the framework for aid to the Palestinians, decided by the Quartet on 9 May and which seeks to set up a “provisional mechanism” (see EUROPE 9189). European External Relations Commissioner Benita Ferrero-Waldner submitted the draft to the chairpersons of the three Parliamentary committees concerned (foreign affairs, budget and development) on Thursday, prior to consulting them on the strategy suggested by her staff. Consultations are continuing with other parties (World Bank, Arab donors etc.) as well as with Member States.
In their analysis of the situation, European Commission staff stress the need to react urgently in a situation that has seriously deteriorated since the election of the new government. The wages of nearly 150,000 civil servants have not been paid for two months. The main reason for this, according to the document is Israel failure to repay taxes and duties, estimated at 60 million dollars per month. To this is added the suspension of the Palestinian Authority's access to the banking system which affects its financial outgoings and incomings. This suspension results from the American decision, which, through legislation on terrorism and its funding, has reduced funding coming from various donors. The document says, however, that some of the factors listed were present long before January's elections.
European Commission staff assert the validity of the Quartet's decision to set up a temporary mechanism to get round the political difficulty of paying new money to the Palestinian Authority governed by Hama while avoiding a social crisis. But they note that any mechanism of this sort can only be effective if Israel adopts a credible and transparent attitude and accepts the injection of money into the Palestinian economy through individual incomes.
Commission staff highlight three priorities: (1) direct payment for purchase of medicines and other essential materials; (2) payment for energy supplies; (3) funding for workers deprived of their wages. The first projects responding to political constraints and to these priorities on the ground have been prepared by EuropeAid.
The first imperative, according to the document, is to clarify the respective roles of the EU and the World Bank, which seems unhappy about several aspects of the way the mechanism will work. There is also the need to clarify key objectives: should these be limited to the health and education sectors alone? According to Commission staff, the overall mechanism should be sufficiently flexible to allow other donors (such as Arab states) to cover other sectors of the Palestinian administration, if they wish, and it should also make repayment by Israel of taxes due to the Palestinians easier. There should be particular interest paid to monitoring the use of funding (call for external auditors), to ensure, in particular, that Hamas or any of its Ministries cannot use these funds for their own ends. Contact is continuing among the various players, the members of the Quartet, Palestinian President Abbas and Israel. During his meetings in Strasbourg on 16-17 May, Mahmoud Abbas gave assurances about his ability to control this use within the Finance Ministry, but he also spoke of his worry about not creating further tension in his relations with Hamas. Israel seems willing to listen to EU proposals to ease the social tension in Palestine, while drawing attention to the need not to lessen the pressure on Hamas, or anything that could be seen as helping it or legitimising its message.