According to a press release by the European Coalition for Israel, the EU suspends 35 millions of aid to Palestinians due to the ”lack of budgetary discipline”. Its a well known fact to those who oversee EU funding to the Palestinian Authority, that the P.A. book keeping system is riddled with inconsistencies and gaping holes.
Back in February of 2004, the OLAF investigation concluded that:
“tens of millions of dollars in humanitarian aid, donated by the EU to the PA has been utilized for terrorist operations against Israel.”
By Dr. Jürgen Bühler(European Coalition for Israel):
Although by its own admission, the EU is the largest single donor to the PA, foreign aid from literally all over the world continues to pour into the Palestinian areas. According to Nigel Roberts, the World Bank’s senior representative for the West Bank, other donors have meanwhile doubled their annual disbursements to almost $1 billion, the equivalent of over $310 per person per year.
This makes the level of foreign contributions to the Palestinians the highest per capita aid transfer in the history of foreign aid anywhere.
Due to such a well-meaning flow of aid one would rightly expect the social situation under Palestinian Authority control to have improved dramatically over recent years. However United Nations figures indicate that the situation in the Palestinian areas continues to be one of deep poverty and great need. UK-based Charity Christian Aid claims that more than 2.2 million people in the territories survive on less than £1.05 a day (approx. €1.50). The situation is even worse in Gaza where citizens live on average on £0.85 a day (approx. €1.24) – way below the official UN poverty line.
The question of what happened to all the money is partially answered by high-ranking Palestinian officials themselves. Mohammad Dahlan, the current PA Minister for Civil Affairs and former Interior Minister under Yasser Arafat told Kuwait’s Al Watan newspaper in August 2004 that of all of the funds which foreign countries had donated to the Palestinian Authority, a total of $5bn have “gone down the drain, and we don’t know to where.”
The misuse of foreign aid within the PA is apparently on such high level, that immediately after Israel’s disengagement from the Gaza Strip the Harvard trained Governor of the Palestine Monetary Authority, George T. Abed stated: “If you poured in a lot of financing at this time, it would not have a big impact. It would not be very effective. Governance is poor. It would be wasted.”
 World Bank News Release 2004/451/MNA: ‘World Bank Paper Urges Major Easing of Israeli Closure Measures and Stepped-up Palestinian Reform Efforts’, 24 June 2004. Both points were re-iterated by Nigel Roberts in separate interviews with Scotland on Sunday, 29 February, 2004 and The Middle East Times, 27 April, 2005
 Figures provided by UNWRA in November 2004 and the United Nations Office for the Coordination of Humanitarian Affairs in January 2004 and cited by Christian Aid: ‘Christian Aid in Israel and the Occupied Palestinian Territories,’ July 2005: http://www.christian-aid.org.uk/world/where/meeca/isrpalp.htm
 ‘Arafat “ruining his people” says protégé,’ The Guardian, 2 August 2004 ‘Expert says Palestinians don’t need financial aid,’ San Francisco Chronicle, 4 September 2005The ECI had received an invitation by the EU parliament, to make a presentation for a new funding model,
on which future funding to the PA will be based, that will require the utmost in openness and accountability. It will be interesting to see how this latest attmept by Brussels to curb finacial irregularities by the PA, will be received.
According to former Dutch MEP, Rijk van Dam, :
“Funds for the Palestinian population should not only meet the needs of the recipient through strict auditing, but also have to been connected with strict benchmarks on human rights, freedom, democracy and the rule of law. The EU should commit itself not to support financially any authority which permits or even encourages incitement to hatred or violence against ethnic or religious minorities by its leaders, media or education system”.
This latest move by the EU, proves to me that the EU can take action when credible proposals are offered, and the political will is found. KGS