EU aide commissioner urges Israel to unfreeze custom duties to PA

Apr 27, 2007, 13:27 GMT

Jerusalem - European humanitarian aid Commissioner Louis Michel blamed Israel Friday for the 'grave' fiscal crisis in the Palestinian Authority, and called on it to unfreeze some 600 million US dollars it owes the PA in custom duties collected on its behalf.

'Contrary to what is sometimes said, the cause of this crisis is not the suspension of direct international budgetary aid,' to the current and previous Hamas-led Palestinian government, Michel told a conference in Jerusalem on humanitarian aspects of the Middle East

conflict.

'The principle reason is the suspension of transfers to the Palestinian Authority of tax revenues and custom duties pursued by Israel on behalf of the Authority and which represents a very large part of the latter's budget,' he said.

Michel, who was wrapping up a three-day visit to Israel and the Palestinian areas, said the EU had called on Prime Minister Ehud Olmert to use the Temporary International Mechanism (TIM) set up by the bloc as a means of transferring funds directly to health workers and Palestinian civil servants to meet their basic needs.

'We hope, we expect the Israeli government to cease this possibility,' he said.

Israel transferred 100 million dollars directly to Mahmoud Abbas' office in December, as part of a goodwill measures promised by Olmert to the Palestinian president two months earlier. This, however, was 'not enough,' Michel said.

The Belgian EU official said human rights in the region were threatened most by attacks on civilians, condemning both the near- daily rocket attacks by Palestinian militants from Gaza on Israeli civilian towns, and Israeli military actions targeting Palestinian population centres.

But he also stated that Israeli restrictions on movement 'annihilated any chance for economic development in the Palestinian territories,' pointing out that nearly 60 per cent of Palestinians lived under the poverty line of 2 euros a day.

Israel says it has imposed the restrictions to prevent suicide bombers from reaching Israeli cities from the West Bank, and says they have helped to greatly reduce such attacks.

It also says it froze the transfer of taxes collected on goods that pass through its ports and airport on their way to the PA to prevent the money from reaching Hamas militants.

Michel was due to continue his Middle East tour in Jordan and Syria, where he was to visit humanitarian projects funded by the EU.