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Sun 5 Mar 2006 04:00 AM

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Palestine gets new EU aid package

The people of Palestine have been handed a financial lifeline by the European Union (EU), which has offered the Arab state US$142 million in emergency aid.

The people of Palestine have been handed a financial lifeline by the European Union (EU), which has offered the Arab state US$142 million in emergency aid. Whilst some will go to the current caretaker government, most of the money will go to aid programmes and to pay outstanding energy bills.

The aid package is the EU’s first since resistance group Hamas was elected to parliament in January. The US has since halted its financial donations, refusing to offer support to a Hamas-led government it classifies as a terrorist organisation.

Palestinian finance minister Mazen Sinukrot hailed the “wise decision” of the EU. Unsurprisingly, however, the move was criticised by Israel, who called it “the wrong decision at the wrong time, to the wrong address.”

“In a couple of weeks, Hamas will be in government,” an Israeli spokesman continued. “What kind of assurance do the Europeans have that this money will be used only for humanitarian purposes?”

The package includes US$74 million that will be channelled through UN agencies to the poorest parts of the Palestinian territories. US$20 million will pay the salaries of Palestinian Authority (PA) officials, and a further US$48 million will be directed towards electricity and other energy expenses.

The move comes after Palestine’s deputy finance minister Jihad Alwazir had warned that vital services in the state were on the verge of collapse, as the wages of key public sector staff are dependent on the PA receiving foreign aid.

“The message we’re telling [the international community] is to look at the Somali scenario,” he said. “When the Somali government failed in the 1990s it took the international community close to 15 or 16 years to try to stabilise the situation. “It is not in the interest of the region, and it is not in the interest of the peace process or the international community to lead us to a Somalia example,” he added.

Foreign aid is of vital importance to the PA, after the Israeli government last week announced that they were suspending tax revenue payments owed to the Palestinians under the Oslo Accords. Such payments are worth over US$50 million a month, and are handed directly to the PA.

Last December, the EU blocked a US$40 million payment after Palestine failed to meet a series of deadlines by which it was supposed to have its finances in order.

Despite ongoing concerns with regard to the threat of financial mismanagement, the EU has now agreed to release half the sum.

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