EU steps in to save Palestinians from despair

[sonz]

The European Union offered to give the Palestinian Authority 120m euros ($140m; £83m) emergency aid to prevent a looming financial crisis that threatens the economically devastated Palestinian nation, specially that Israel and the U.S. embarked on a campaign aimed at isolating the Palestinian Authority and starve it of money to force President Mahmoud Abbas call for a new election, following sweeping victory of the Islamic anti-Israel movement, Hamas, in the country’s parliamentary elections.

The EU also unblocked 17.5 million euros frozen in a World Bank-administered trust fund.

"Today I will announce a very substantial package of assistance to meet basic needs," European External Relations Commissioner Benita Ferrero-Waldner told reporters.

"In effect we will pay electricity bills for them, direct to the utilities concerned, including in Israel," she added.

Waldner’s remarks came as EU foreign ministers gathered to discuss ways to respond to the impending formation of a new Palestinian government led by Hamas.

The international community decided to reconsider financial aid to the Palestinian Authority following Hamas victory. Also responding to the group’s shocking victory, Israel announced earlier this month cutting off monthly payments of $50m in tax revenues.

64m euros will be distributed through UN agencies to the poorest in the Palestinian territories, the Commission says.

"The Palestinian Authority cannot achieve balance in its finances without outside help," Ms Ferrero-Waldner said, calling on world nations, especially Arab countries, to do more to fund it, noting that even when Israel transferred the tax revenues which it collects on behalf of the Palestinians, the Authority still runs a deficit.

The rest of the money will go for electricity payments and oil bills and as well as the salaries of Palestinian Authority officials.

This is the European Union's first payment to the PA since the 25 January election won by Hamas, viewed by the U.S. and the EU as a "terrorist organisation".

It hasn't been made clear yet whether the bloc, the largest donor to the Palestinian Authority since its establishment under the Oslo peace process in 1994, will maintain its funding for the PA with Hamas leading the new government.

"The issue before the EU is whether we resume aid to the existing interim authority, not to any Hamas government that has yet to be sworn in," said UK Foreign Secretary Jack Straw.

Hamas has been facing mounting international pressure, special aid donors, to stop its anti-Israel attacks and recognise the Jewish States.

"We are awaiting to see a positive position from the EU over the support to the Palestinian people, who chose Hamas to represent them," said Hamas political leader Khalil Abu Laila in an interview with Reuters news agency.