EU throws lifeline to Palestinians

From The Australian March 01, 2006 by Abraham Rabinovich, Jerusalem . . .

THE European Union gave the Palestinian Authority a temporary lifeline of $US143million ($194million) yesterday after special Middle East envoy James Wolfensohn warned it was on the verge of collapse.The one-off EU payment, which will tide over the Palestinians until a Hamas government takes over, came in response to a plea from Mr Wolfensohn, who told the EU the authority may need as much as $US360million in new funding to pay the bills for February and March. "Unless a solution is found, we may be facing the financial collapse of the PA within two weeks," he said.

The authority needed $60-80 million just to pay its wages bill for February.
Addressing the quartet of peace mediators - the EU, UN, US and Russia - Mr Wolfensohn said: "I do not need to tell each of you that the failure to pay salaries may have wide-ranging consequences - not only for the Palestinian economy but also for security and stability for both the Palestinians and Israelis."

French Foreign Minister Philippe Douste-Blazy said the decision to provide emergency aid to the Palestinians was intended to prevent "economic chaos".

. . .. Suggestions are being floated about a long-term plan that would see funds channelled directly to humanitarian organisations, bypassing the authority's budget, much of which goes to its security forces. Mr Wolfensohn proposed a meeting of donors next week "to discuss mechanisms we can all countenance without violating any of our own laws and policies". He was referring to Hamas's status as a terrorist organisation in the view of US and EU countries and the law in those countries barring funding to any such organisation.

Palestinian sources told al-Khayat, an Arabic newspaper published in London, that Iran had pledged to give $US250million to the Hamas-led PA if the international community cut back on funding. The promise was reportedly made to Hamas's political leader, Khaled Mashaal, on a visit to Tehran last week. It is not clear if it was a continuing commitment or a one-time pledge. . . .