ARAB-EUROPEAN RELATIONS - Feb 27 - EU Announces [euro]120m Aid Plan For Palestinians.

The EU announces plans to provide the Palestinian people with more than 120m in aid before the new Hamas government takes office. The EU's commissioner for external relations Benita Ferrero-Waldner, said 64m ($76.5m) would go to the UNRWA for Palestine Refugees and 40m to pay energy bills - enough for two months. The European Commission would also make a 17.5m payment to the PA. "No other donor has stepped forward to make this kind of contribution", said the commissioner, who is responsible for much of the EU's foreign aid budget. "The bulk of the money is going to the Palestinian people. We have to see what will be the programme of the government. We have to give them the time". Washington, which has demanded that the PA repay $50m in previous US assistance when Hamas takes control of the government, nonetheless welcomed Mar 27 move, saying that it supported efforts to prevent a collapse of the interim government and to get humanitarian aid to the Palestinian people. Washington's stance is at odds with Israel, which cut off all monies to the Palestinians after the swearing-in of the new legislature. But the State Department insisted that Hamas had not yet taken control, and that the US would halt all aid "should there be a Hamas government". The PA's financial plight was underlined by a recent letter to the "quartet" - the EU, the US, Russia and the UN - by James Wolfensohn, their envoy to the Middle East. "Unless a solution is found, we may be facing the financial collapse of the PA within two weeks", he said in the letter, dated Feb 25. "The first target is even sooner - I am advised by the acting PA minister of finance that he requires $60m-$80m next week to begin to pay wages". He added the PA had a total funding gap of $110m-$170m for February and March. "We are in the midst of directly undermining the policy set by you on 30 January", Wolfensohn told the quartet - a reference to its agreement last month that international support should be provided to the caretaker PA administration.