EU Gives More Aid to Arafat in Defiance of Bush

28 June 2002

A threat by President George Bush to topple Yasser Arafat by starving the Palestinian Authority of cash made little immediate headway yesterday when the European Union released new funds to repair the damage caused by Israel's military invasions.

Speaking from the G8 summit in Calgary late on Wednesday, Mr Bush said: "We won't be putting money into a society which is not transparent and [is] corrupt, and I suspect other countries won't either."

The EU, which together with the Arab League has been keeping Mr Arafat's government afloat, will continue to provide 10m (�6.5m) a month to his administration, a spokesman for the external affairs commissioner, Chris Patten, said. The Arab League provides some $55m (�36m) a month.

Yesterday, the EU announced a further 5m in aid to repair computers and other equipment destroyed when Israeli forces occupied the West Bank last April, after Mr Patten said there was no evidence for Israeli charges that Palestinians had siphoned off EU funding to launch attacks on Israel.

Mr Bush said yesterday that he was grateful for the "positive" response to his call to withhold US support for a Palestinian state while Mr Arafat remained in power. "European leaders understand something has to change in order for there to be peace, and that starts with free elections, a new constitution, transparency, rule of law amongst the Palestinians," he told reporters at the G8 summit.

However, a spokesman for Mr Patten said: "The president himself has made it clear he doesn't want the US funding the PA, but he doesn't want anybody else to stop funding the PA because he knows what the consequences would be . . . the complete breakdown of any authority."

Washington provides no direct aid to the Palestinian Authority although the CIA took a leading role in training and funding the Palestinian security forces - which Mr Sharon accuses of attacks on Israel - until two years ago. Last year, the US dispersed $114m on Palestinian aid projects through the United Nations, World Bank, and non-governmental organizations.

Even so, President Bush's remarks have caused concern among the Palestinians because of American influence on the World Bank and other international institutions, and because of the pauperization of Palestinians after 21 months of bloodshed.

Palestinian economists said cutting off aid would lead to catastrophe. Mr Arafat's administration has just enough cash to cover the salaries of bureaucrats, the police, teachers, and hospital workers. Some 180,000 public employees have yet to be paid for May.

With an Israeli army curfew on seven West Bank towns, 65% of Palestinians are out of work. Two-thirds of the population of the West Bank and Gaza are living on less than $1.50 a day.

"The danger is that America will use its political weight on other donors, and if that is implemented, it will cause immense damage," said Mohammed Shtayyeh, director of the Palestinian economic council for reconstruction and development.

"If this threat is carried out it is the total end of the Palestinian Authority as an institution holding the Palestinian people together."

Suzanne Goldenberg, Jerusalem
Published in the Guardian © Guardian Newspapers Limited 2002

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