|Honourable Members of the European Parliament,
Unfortunately my intervention today comes at a very tense moment where the situation in the region is deteriorating – both in Lebanon and the occupied Palestinian Territory as well as in Israel.
The events of recent days in Lebanon, with significant loss of life in such a short time (almost 100 dead in 3 days), are a startling reminder of the need to work on a regional solution to this conflict. As you know, Javier Solana is in Beirut today, at this very difficult moment.
In the context of the fragile situation in Lebanon, stability is of great importance. Whatever the root cause of the tensions there, I call on all sides to refrain from violence and to prevent the situation from escalating.
Let me now turn to the occupied Palestinian Territory. I am deeply concerned about last week’s inter-factional clashes in Gaza which resulted in 55 dead and 280 injured. Regrettably, it seems that Gaza risk sliding into civil war. Factions should stop hostilities immediately and reconcile their differences within the National Unity Government.
I also deplore the resumption of Qassam rocket launches from Gaza to the Israeli city of Sderot, which caused yesterday the death of an Israeli woman. In retaliation Israeli led air strikes which caused the death of 35 Palestinians. It is important that the ceasefire between Israel and the Palestinians is restored and extended to the West Bank.
During my recent meeting with Palestinian Foreign Affairs Minister Ziad Abu Amr, we discussed the fragile situation of the National Unity Government, especially as concerns security and the budget.
The first decisions taken by the Government seem to point in the right direction. Abu Amr mentioned that this government considers itself the Cabinet of President Abbas. This government has a different programme from its predecessor. I must say that I felt encouraged after this meeting. I think that it deserves our clear support. President Abbas has requested our backing, as his political survival could depend on its success.
In the meantime, Finance Minister Salam Fayad whom I had met right after the formation of the government, faces the incredible challenge of repairing the Palestinian public finances after one year of institutional decay and a sharp decrease in revenues. Against all odds, he has made considerable progress and the technical conditions for receiving direct funding are almost created.
The Palestinian Authority has three main sources of funding: internal taxes, taxes and customs revenues on imported products, and foreign aid. Internal taxes have dwindled as a result of the economic slowdown. Since last year’s election, Israel withholds tax and customs revenues on imported products. This is the major cause for the financial trouble of the PA.
Furthermore, foreign aid cannot flow easily as a result of US imposed restrictions to financial transactions with the PA government.
We are helping to solve these financial problems in three ways. First, as you know our Temporary International Mechanism has become a core source of funding for allowances, fuel costs and core supplies. Since the formation of the National Unity Government we already manage this TIM in close cooperation with Salam Fayyad's Ministry of Finance.
In fact since the establishment of the TIM last June, we have transferred over €300 million. In that regard, I would like to thank the Parliament for its support in making more budgetary resources available so that the TIM can continue to deliver.
A second way in which we are helping is to work with our US partners to facilitate the transfer of foreign aid to the Palestinians, in particular the Arab funds pledged in Riyadh at the recent Arab summit.
Last but not least, we have urged Israel on multiple occasions to resume the transfer of Palestinian tax and customs revenues. We are using all the instruments we have, whether economic or political, but the survival of this government does not depend only on us. Only the resumption of all financial flows to the PA can deliver a durable solution to this financial crisis. And the Palestinians have to play their role and decide once and for all to end their fighting and focus on peace.
Incredibly, we still think that despite the distress we are witnessing in the occupied Palestinian territory and indeed in Lebanon, we should profit from an important window of opportunity in the peace process before it might shut down again.
It is crucial that the Arab League re-launched its Peace Initiative. As you know, there has been a determined diplomatic follow up at the highest levels of Council, Commission and European Parliament. I myself have had several meetings with the “follow up” committee (which is tasked to explain the Initiative to international partners) both in Sharm el Sheikh, Riyadh and, more recently, at the GAERC in Brussels.
Secretary General Amr Moussa and others have underlined the urgency which is more evident today than ever. He asked for our help to bring the Parties to the table.
On the Israeli side, I am encouraged that FM Livni has been to Cairo and is expecting a follow up visit of her Jordanian/ Egyptian counterparts in the coming weeks. She has thus shown willingness to engage, more so than in the past.
At the same time I fully endorse the efforts of Secretary of State Condoleezza Rice to bring the parties together and start discussing the political horizon for the Palestinians.
The energy and efforts invested by Jordan, Egypt, Saudi Arabia and others must also be recognised.
And next week the Quartet will meet. I hope that this meeting will respond to the efforts of the Arab League, which could indeed re-launch progress on all tracks of the peace process.
I will of course continue to keep the Parliament closely informed of developments in this sphere