Post by Salem6 on Jun 18, 2007 12:13:11 GMT
The EU plans to resume direct economic aid to the Palestinian Authority to support the new Fatah-led government, foreign policy head Javier Solana says.
The EU is the biggest donor to the Palestinians
But direct payments will not resume for the moment as the EU wants to see proper financial mechanisms in place.
President Mahmoud Abbas named an emergency cabinet excluding Hamas after it seized control of the Gaza Strip.
The EU and US imposed an embargo on the previous government after the Islamist group's election victory 18 months ago.
Mr Solana's comments came after Israel said it would be prepared to ease economic sanctions now that Hamas played no official role in the Palestinian government.
In Gaza, there were reports that the territory's 1.3 million residents faced shortages of food and other essential supplies.
But an Israeli fuel company, Dor Alon, said it had restored normal fuel supplies to the Gaza Strip after Palestinians protested against an earlier suspension, a move the company said had been co-ordinated with the Israeli military.
'Direct relationship'
Speaking before a meeting of foreign ministers in Luxembourg, Mr Solana said the EU would be prepared to make some direct payments to the government of the new Palestinian Prime Minister, Salam Fayyad, in the future.
Mr Fayyad, widely respected among international organisations and donors, served as finance minister in the previous administration.
"No doubt part of it will go through the account that when he was minister of finance he had established and he will have kept as prime minister, so it will be a direct relationship with the government," Mr Solana said.
"It is very important that he is able to construct a budget, and through that budget he will be able to help both people in Gaza and the West Bank."
Mr Solana added that the EU also planned to deliver economic aid to Palestinians in Gaza, but this would be channelled through the UN or an existing Temporary International Mechanism that bypasses Hamas.
"In order to help the Palestinian people in Gaza, we will need some mechanism that cannot be direct support," he said.
The EU, the biggest donor to the Palestinians, continued humanitarian aid during the ban on contact with the former Hamas-led government.
Transparency concerns
However, the EU commissioner for external affairs, Benita Ferrero-Waldner, said the bloc would not resume direct aid for the moment.
"It's not black and white," she said. "We want to be very careful how we do things."
Ms Ferrero-Waldner said the new Palestinian administration had to have the financial mechanisms in place first to effectively control and distribute the aid.
"It is a matter of financial control and transparency," she said.
"I cannot imagine [the emergency government] is already there and has all the structures in place."
Ms Ferrero-Waldner added that she was hoping to meet Mr Fayyad soon in order to work out how to proceed.
Israel's foreign minister, Tzipi Livni, who is taking part in the talks in Luxembourg, is expected to be asked to release some of the $800m of Palestinian tax revenue currently held by her government.
"The objective of today's discussion will be to press upon the Israeli foreign minister... that they too need to support the emergency government," said the German foreign minister, Frank-Walter Steinmeier.
Mr Steinmeier said there was a broad international agreement on the need to work with the Palestinian Authority.
news.bbc.co.uk/1/hi/world/middle_east/6762777.stm