EU Announces Massive Financial Support to Palestinian Government

According to Reuters, although Haniyeh, the leader of the Islamic extremist military organization Hamas, was appointed as the Palestinian Prime Minister, the European Union will provide large-scale funding to Palestine on the 27th to alleviate the financial crisis that Palestine may soon face.

As the foreign ministers of EU member states prepare to meet in Brussels to discuss how to respond to Hamas's imminent formation of a Palestinian government, EU Commissioner for Foreign Relations Benita Ferrero Waldner told reporters: "Today I will announce a massive funding package for Palestine to meet their basic needs."

The funding package will total 120 million euros ($142 million), including 40 million euros to pay electricity bills and another 64 million euros in aid through the United Nations Committee for Palestine Refugee Relief. "In fact, we will pay Palestinian electricity bills, and those fees will be paid directly to the facilities that provide electricity to Palestine, including some facilities in Israel," Waldner said.

The European Union is the Palestinian government's largest donor, but the victory of Hamas in legislative elections has raised questions about whether its funding will be available because the EU considers Hamas a terrorist organization.

Israel had previously stopped paying $50 to $55 million in taxes to the Palestinians each month, while U.S. officials also warned that Washington might cut off funding to the Palestinians. Waldner said: "The Palestinian government will not be able to achieve financial balance without outside help." Waldner also called on other parties, especially Arab countries, to provide more funding for Palestine. She said, Even when Israel pays taxes and fees for Palestine, the Palestinian government still faces a fiscal deficit.

At the same time, the EU also decided to unfreeze a trust fund of 17.5 million euros frozen in the World Bank, which had not been paid because the Palestinian government failed to meet certain requirements. This trust fund will be used to pay wages and is the only fund directly paid to the Palestinian government in the EU funding plan to be announced on the 27th.