EU back plan to aid Palestinians

European Union leaders endorsed a plan today to channel aid to cash-starved Palestinians focusing on health, power supply and support for needy families while maintaining a funding freeze on the Hamas-led government.

The plan provoked angry criticism from the militant group.

“This is regrettable,” said Hamas Information Minister Youssef Rizka, who said the Europeans had bowed to American pressure to follow a “hostile policy” that aimed to divide Palestinians.

EU spokeswoman Emma Udwin said the EU was considering an initial allocation of about €100m. The EU urged other donors, including Arab states, to “consider early and substantial contributions.”

The fund will be managed by the World Bank and the EU working with the office of Palestinian President Mahmoud Abbas whose Fatah movement is Hamas’ main political rival.

“We Europeans are determined to play our part in preventing a humanitarian crisis in the Palestinian territories,” said EU External Relations Commissioner Benita Ferrero-Waldner, who will head to the Middle East on Monday to present the plan.

The EU said its plan was drawn up in consultation with the United States, Russia and the United Nations, who agreed with the Europeans in May that a mechanism had to be found to keep the Palestinian economy afloat after most international aid was cut off following Hamas’ January election win.

Udwin said she expected final approval from the full Quartet group of Middle East mediators and other donors within days. The EU wants to have the mechanism up and running by early July to channel aid to the Palestinians but bypass Hamas.

A statement issued after the two-day EU summit made no mention of the payment of salaries to Palestinian government workers – which is opposed by Israel – but it did refer to “social allowances” which EU would entail payments to health workers and other needy families.

“Nobody is paying wages, forget wages,” Udwin said. “There is a big difference between wage and allowance.”

EU leaders insisted there would be no contact with Hamas unless it renounces violence, recognises Israel and respects existing peace agreements.

A leading member of Abbas’ Fatah movement welcomed the plan, but was critical of the decision not to cover salary payments.

“Any help that will alleviate this human catastrophe is very much needed,” said Saeb Erekat, a close associate of the president.

“But I had hoped that the mechanism would involve the salaries of the 160,000 (public sector) workers. We don’t want to turn our society into a welfare society.”

Israel gave a cautious response.

“Israel has consistently supported the international community’s direct support for the Palestinian people, support that will bypass the Hamas government,” Foreign Ministry spokesman Mark Regev said.

The EU urged Israel to resume the transfer of more than 40 million euros in monthly tax revenues it collects on behalf of the Palestinians.

Those funds are “essential in averting a crisis in the Palestinian territories,” the draft EU statement said. The EU said the revenues could be channelled through the new mechanism.

Israel blocked those funds after the Hamas election victory. The EU, the US and other donors also froze hundreds of millions of euros in direct aid to the Palestinian government after the win by Hamas, which the EU and US have branded as a terrorist organisation.

The aid freeze has meant government employees, including teachers, health workers and security personnel, have not been paid in three months. Only health workers are specifically mentioned in the EU plan as being eligible for handouts, but the financing mechanism will also create a “social safety net” making direct bank transfers to the accounts of needy families.

Udwin insisted the plan “will operate with strict controls and in full accountability and transparency.”

The EU draft statement urged Israel to resume peace talks with Abbas. It urged him to disarm violent groups and halt attacks on Israel.

In a message to the Israelis, the EU condemned violence against Palestinian civilians and urged a halt to “any action that threatens the viability of an agreed two-state solution and from acts that are contrary to international law.”

The statement referred in particular to the construction of Israel’s West Bank security barrier and Jewish settlements in the area.

Referring to Israeli Prime Minister Ehud Olmert’s determination to draw Israel’s final borders by 2010 – with or without an agreement with the Palestinians – the EU insisted it “will not recognise any change to the pre-1967 border other than those agreed by both sides".