Wednesday, 7 February 2007

EU accused of wasting Palestine aid cash

The EU has paid almost €4 million in bank charges on aid channelled to Palestine in a new “mechanism” set up in order to bypass the militant Hamas party after elections last January.

Leading UK charity Oxfam attacked the EU system as an “aid fiasco” after it emerged the lost millions ended up in the coffers of London-based bank giant, HSBC, which wires the transfers.

European states are wasting millions of euros of aid to Palestine through this bureaucratic scheme. The way that European aid is currently being delivered is undermining Palestinian basic services and damaging a highly fragile economy,” Oxfam director Barbara Stocking said.

The European Commission played down the criticism, arguing that the fee paid to the London bank represented 4 percent of all costs which is well below the 7 percent maximum ceiling, UK papers report.

The scheme has so far provided financial aid of €107.5 million to 144,000 heads of poor households and state employees, with the allowances representing about 40 per cent of former salaries and covering health services and fuel supplies, the Financial Times writes.

The so-called Quartet on the Middle East peace process – the US, UN, EU and Russia – initially froze aid payments when Hamas – listed as a terrorist group by the EU and US – came to power due to fears the cash could be re-directed to military ends.

The international community also urged the group to recognise the state of Israel and formally renounce violence before aid flows could resume.

But in a bid to avoid a humanitarian catastrophe, the Quartet gave the EU permission to channel emergency aid via the office of more moderate Fatah-faction president Mahmoud Abbas directly to families and key public sector workers in need.

By Lucia Kubosova
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