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EU Approves Aid for Palestinians

27 February 2006

The European Union agreed Monday to unblock short-term aid for the financially struggling Palestinian Authority. But, it remains unclear whether European financing will continue after the new Palestinian cabinet is sworn in.

The roughly $144 million in European Union aid is expected to cover just the essentials for the cash-strapped Palestinian Authority. A large chunk is earmarked to pay the Palestinian government's energy bills. An even larger slice will be funneled through the United Nations to pay for things like education, health and social services in the Palestinian territories. Only a small percentage, about $21 million, will go to paying Palestinian government salaries.

The short-term assistance from the EU, the Palestinian Authority's largest donor, comes as Palestinian officials are scrambling to find funding to bankroll their government. Israel recently cut off transfers of roughly $50 million a month in tax payments to the Palestinians. And Washington called on the Palestinian Authority to hand back another $50 million in donations.

Both moves took place following the victory of the radical group Hamas in Palestinian elections. The organization, which so far refuses to recognize the state of Israel, is on both the U.S. and European Union terrorist lists. Europe and Washington want Hamas to renounce violence and pledge to work toward a peaceful solution to the Middle East conflict. But the EU has postponed a final decision on cutting off aid to the Palestinian Authority, noting a Hamas cabinet has not yet been sworn in.

On Monday, British Foreign Secretary Jack Straw said Britain, for one, would follow World Bank recommendations to resume short-term funding to the Palestinian Authority.

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

The funding is expected to keep the Palestinian Authority afloat for another two months.

Also Monday, EU foreign ministers meeting in Brussels threatened to freeze EU membership talks with Serbia unless war crimes fugitive Ratko Mladic, the former commander of Bosnian Serb forces, is handed over to the United Nations War Crimes Tribunal in The Hague.

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