European Union foreign ministers on Monday endorsed an indefinite freeze of direct aid to the Hamas-led Palestinian government, but said they will continue to fund health care, education and other humanitarian projects.
Officials said EU nations will review separate bilateral aid as well. Britain, Denmark and the Netherlands have already halted theirs and more may follow suit although no immediate statement to that effect was made.
The aid cutoff plunges the Palestinians into deeper financial crisis. It will dry up hundreds of millions of dollars in annual EU money that had been going directly into the Palestinian Authority's budget for a wide range of infrastructure projects and the payroll for 140,000 government employees.
The United States, Canada and non-EU member Norway have also cut off payments. Hamas has condemned the suspension of aid as unfair, but has not tempered its radical ideology.
Austrian Foreign Minister Ursula Plassnik sought to assure the Palestinians that the decision, which was first announced Friday by the EU's executive office, was not meant to punish or blackmail them for voting for Hamas, a group the EU views as ‘terrorist’ outfit.
Palestinian Cabinet spokesman Ghazi Hamad condemned the decision, calling it ‘a clear punishment of the Palestinian people for their democratic choice ... that will lead to more tension and instability in the region.’
‘This decision is part of the siege and starvation policy which is led by the Israeli government and the USA against our people,’ he said.
Plassnik said EU governments would be hard pressed to justify to their taxpayers aid on a Palestinian government that will not renounce violence, refuses to recognize Israel and does not accept agreements previous Palestinian governments signed with Israel.
‘The Palestinian people have opted for this government, so they will have to bear the consequences,’ Dutch Foreign Minister Ben Bot said.
Hamas, which won the Jan. 25 Palestinian legislative elections, is on the EU's list of ‘terrorist’ organizations, a designation that bars EU officials from any dealings with the group.
The EU foreign ministers agreed that, for now, ‘there should be no contacts at a political level with the new PA government (and) that contacts will continue below that level ... strictly for the purpose of practical business,’ said Plassnik, who chaired the meeting.
She acknowledged, however, that even in delivering humanitarian aid, non-governmental groups often rely on Palestinian government officials, in part because of poor security.
EU External Relations Commissioner Benita Ferrero-Waldner said Europe continues to ‘stand by the Palestinian people’ providing funding for electricity, food, education and other projects, so ‘their basic human needs will be met in the future.’
Aid to the Palestinians from the EU and its 25 member nations usually totals around $615 million a year. Funds that have been suspended amount to about half of that, while the remainder comes from bilateral programs between governments.
The EU appealed to Israel to resume the transfer of Palestinian tax and customs revenues — worth around $50 million a month — that it collects on behalf of the Palestinians but has been withholding since Hamas' election win.
In a statement, they also urged Israel ‘to desist from any action that is contrary to international law.’ That amounts to a clear plea for Israel to abandon its plans to unilaterally withdraw from parts of the West Bank, which would in effect draw its border with the territory without negotiations.
The annual Palestinian budget is about $1.9 billion. The $1.3 billion in foreign aid last year accounted for 32 percent of Palestinian gross domestic product, making Palestinians the biggest per capita recipients of foreign aid in the world.