Local view for "http://purl.org/linkedpolitics/eu/plenary/2002-10-22-Speech-2-159"
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"en.20021022.7.2-159"2
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". – There have been several allegations about alleged misuse of European Union monies by the Palestinian Authority. Some time ago, part of the Israeli Government prepared a dossier claiming to show that President Arafat and the Palestinian Authority used funds provided by the European Union, along with Norway and some other countries, to finance supporters of terrorism or even directly underwrite acts of terrorism.
These are most serious allegations. They have been carefully examined by the Commission. I should stress, as I have already done before the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy and the Committee on Budgets, on 19 June, that, on the basis of all the documents made available by the Israeli Government, the Commission has not found evidence of European Union funds being used for purposes other than those agreed between the European Union and the Palestinian Authority.
The Commission provides EUR 10 million a month to the Palestinian Authority in budgetary support. This constitutes 10% of their overall budget. European Union support has helped prevent the total collapse of Palestinian institutions and, therefore, preserved one of the interlocutors in the peace process. At the same time, it has provided the necessary pressure and guidance for serious reform, particularly in public finances. Let me remind the House that, ultimately, the European Union provides budgetary support to mitigate the effects of the freeze of revenue transfers totalling over USD 680 million by the Government of Israel over the last couple of years.
Budgetary assistance is subject to a number of conditions relating to administrative and judicial reform, financial control and so on, which are reviewed and strengthened on a regular basis. Disbursement of budgetary support is monitored on the ground by the Commission and the International Monetary Fund, which reports on a monthly basis on economic and fiscal developments and provides information covering revenue developments, evolution of employment, wage bill and non-wage current outlays, developments of capital expenditure and so on. The merits of our budgetary assistance have been widely recognised, not only by the Council of Ministers, but also by the international community. The United States and the other members of the quartet – the UN and the Russian Federation – have recognised the progress which has been made in the management of the Palestinian Authority's financial affairs, thanks to our aid.
Achievements in reform, which have been made largely thanks to our budgetary support, include the establishment of a single treasury account, the consolidation of all the Authority's public finances and progress towards a modern system of financial control. Next comes the imposition of an austerity budget, then the containment of arrears and, finally and very importantly, the adoption or entry into force of key legal acts, such as the judicial independence law and the basic law.
It is also worth remembering that, in recent weeks, Israel has paid over USD 45 million to the Palestinian Authority Ministry of Finance, which is a small but still positive step. This money has been transferred into the same treasury account as the EU budgetary support and is subject to the same European Union and IMF monitoring mechanisms I have just described. I hope some Members will reflect on that sentence.
Israel has therefore recognised that progress has been made in the financial domain, and that is in no small part due to our policy-based financial assistance and budgetary support. Ultimately, Israel should resume regular transfers and in that respect I welcome the constructive discussions held recently between Prime Minister Sharon and President Bush.
Finally, it is our firm view that financial support should be continued. Withdrawal of budgetary support will lead to collapse of the Palestinian Authority, further chaos and a more desperate humanitarian crisis. The Commission will continue to monitor the use of budgetary support and compliance with all the conditions attached to it. We will, as always, investigate all allegations of the misuse of funds as a matter of the utmost priority."@en1
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