Brussels, 09/06/2006 (Agence Europe) - The European Commission will on Monday present to the Council an outline on which the Member States will decide in order to contribute to the implementation of the “Temporary International Mechanism” decided by the Quartet to maintain aid to the Palestinians but with assurances that not a single euro will go to Hamas. If the plan is first accepted by the Council and then approved by the Quartet, the European Commission will be in a position to send the first instalments of aid rapidly.
Initial figures are put forwards in the text to be submitted to the Council on Monday. In total, European aid will be to the tune of 42 million euros to cover ministerial spending of a social nature (health and education). For salaries owed, the major part, 38.7 million euros, are proposed as a general monthly contribution, but only 31.4 million will actually be distributed to public employees. The remaining 6.1 million will be spent on operational costs and 1.2 on transfer fees. This text has been submitted to the European Parliament (see EUROPE of yesterday, p.6) for consultation on its political direction, and social and humanitarian impact, and also in the Parliament's capacity as budgetary authority. Aid to the Palestinians should draw on both the EuroMed MEDA guidelines and the specific guidelines covering Community action in the Middle East. Amendments to the budget will probably be necessary.
The European Commission suggests that direct assistance to the Palestinian people should be assured but that it should be focussed on essential sectors, at least initially, at a time when customs revenues are drying up. According to the European Commission, these represent two-thirds of the Palestinian Authority's fiscal revenues, which are insufficient to support salaries, which constitute 90% of spending in the education sector and 60% in the health sector. The other sectors targeted concern bills linked to basic provisions (energy) and direct financial transfers to employees. On this last point, the Commission makes its arguments citing the conclusions drawn in the period of the second Intifada (the Sharon era) by the World Bank, which was itself reluctant to transfer salaries, to affirm the positive impact of such action on the morale of the population which would be assured of its basic living standards.
In terms of the way in which the TIM would function, the European Commission underscores the need to be authorised to have direct contact with the Palestinian administration, for obstacles to banking access to be eliminated and for President Mahmoud Abbas' cabinet to play a role as an “interface” and become a direct interlocutor with international donors.
The TIM will be structured in the form of 3 branches. The first will channel the financial flows for basic essential spending, health and education. The EU will immediately input 7 million euros to cover needs, which will be evaluated over 2 months. Its management will rely on the World Bank, which will coordinate all of the international contributions under its ESSP (Emergency Services Support Programmes). The second branch will cover a purely EU action through a European budget line under the IERC (Interim emergency relief contribution), which the Commission proposes to extend and reinforce. This will manage spending for the payment of the energy bills of the ministries targeted (education, health). 20 million euros will be immediately available for spending covering two months. The third branch will result in the creation of a programme for the direct payment of allocations and salaries. The structure of this programme has not yet been established and will depend on subsequent developments in liaison with the various donors. It will be managed in liaison with either a local bank, an international organisation, President Abbas' cabinet or even an as yet unspecified external structure. The money put into it could also, as another alternative, be integrated in a trust fund managed by the World Bank according to procedures yet to be determined and on which the European Commission proposes carious scenarios. An advisory group and a management unit should be set up. These will be composed of representatives of the Quartet. Strict controls will be ensured in conjunction with the President's cabinet, which will have to give the go-ahead on each occasion and authenticate bills to be paid.