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European Union assistance to the Palestinian Authority 2009 budget reaches €207 million

PR/30/2009

Ramallah - Palestinian Prime Minister Salam Fayyad and the European Commission Representative, Mr. Christian Berger, today signed a €39 million financing agreement for direct support to the Palestinian National Authority budget, bringing the total amount committed by the European Union (EU) in 2009 to €207 million. This additional commitment makes the EU the largest provider of direct financial assistance to the Palestinian Authority (PA).

By providing financial support to the budget, the EU helps the PA to provide vital services to all Palestinian citizens, through a monthly contribution for the payment of salaries to the PA's civilian workers and pensioners, both in the West Bank and Gaza. This funding also directly helps the poorer sections of Palestinian society, by providing regular contributions for allowances paid to needy families through the PA Ministry of Social Affairs' social protection system.

The EU currently provides a large portion of the PA's external financing needs. According to the International Monetary Fund, budget support from donors was equivalent to roughly 30% of GDP in 2008. "The EU supports the efforts of the Palestinian Authority to build sustainable institutions for a future Palestinian state. Our long-term goal is also for the Palestinian budget to be supported by the revenues generated by a thriving Palestinian economy," said European Commission Representative Christian Berger. "We fully support the PA's efforts to implement a business-friendly reform programme, strengthen the rule of law and improve security, all of which help to create the conditions for the private sector to develop," he added. "Of course, Israel also has a major part to play: a full implementation of the provisions in the 2005 Agreement on Movement and Access would deliver significant benefits in terms of boosting internal and external trade, a linchpin of the Palestinian economy."

During the ceremony, PM Fayyad expressed his thanks to the EU and individual European countries for their continued financial support of the PA and the Palestinian people, all of which is geared towards the institution and capacity building of a future Palestinian state. PM Fayyad also thanked them for supporting the right of the Palestinian people to establish a state along the 1967 borders on the basis of the relevant UN Security Council Resolutions. PM Fayyad added that the Palestinian people are determined to establish this state within the next two years with East Jerusalem as its capital. Key to this aspiration of statehood is the international community's rejection of settlement activity, which is illegal under international law. PM Fayyad stressed the need for the international community to maintain a unified international consensus requiring Israel to fulfil its Road Map obligations, including the commitment to a comprehensive settlement freeze, especially in and around Jerusalem, a halt to home demolitions and evictions, and an end to incursions, as well as to begin implementation of the 2005 Agreement on Movement and Access.

PM Fayyad took the opportunity to thank the EU for its statement condemning the eviction of two Palestinian families from their homes in the Sheikh Jarrah neighbourhood of East Jerusalem.

The EU is the largest multilateral donor to the PA and has provided it with direct financial support every month without interruption since June 2007. EU funds for the PA are channelled through the EU's dedicated mechanism, PEGASE, which was launched in 2008 and which enjoys some of the most stringent control and audit mechanisms of any aid delivery system. The EU has so far committed €353 in 2009 for the Palestinian people, of which €144 million to support refugees through the United Nations Relief and Works Agency (UNRWA).

Contact:

For English: Nadia Awad, Communications, Prime Minister's Office, 0545349671
For Arabic: Ouf Awadallah, Communications, Prime Minister's Officer, 0598992791
Alix de Mauny, Press and Information Manager, European Commission, 054 802 4915