Members of the European Parliament saluted Palestinian Prime Minister Salam Fayyad’s leadership of the territories and the appropriate use of EU funds. Their meeting took place in the Committee on Budgets (BUDG), on 13 July.. Members of the Committees on Foreign Affairs and Development were also present. The leader of the Palestinian Authority announced his intention to reduce reliance on foreign aid. Fayyad and MEPs renewed calls for an end to the Gaza blockade, with EU representatives anxious to increase the political role of the Union.

Marielle de Sarnez (ALDE, France) asked the Palestinian prime minister what portion of growth depended on EU aid and what portion corresponded to Palestinian resources. Fayyad said that the economy had grown 12% in the first quarter of 2010, compared to that of 2009, and that he believes most of that growth was due to fiscal stimulus.

On the one hand Fayyad said he was “grateful” to the EU for its substantial economic aid but on the other hand he reminded his audience that reliance on aid cannot lead to stable and sustainable growth. Ultimately, he wishes to bring external financing down from US$1.8 billion (€1.4 billion) to US$1.2 billion (€1 billion). The leader of the Palestinian Authority did not therefore seem too preoccupied by the announced decrease of EU aid for 2011, down to €200 million from €300 million.

In order to compensate for this shortfall, Fayyad wishes to rely increasingly on customs duty and VAT revenues. For that to happen, he insists on the necessity of ending Israel’s blockade of Gaza and opening border crossings. For now, most goods enter the Palestinian Territories through hundreds of tunnels dug between the Gaza Strip and Egypt. This contraband business is eating up potential income for the Palestinian Authority. The prime minister estimates that taxes collected at the border could increase the revenue base by 25%.

MEPs joined the chorus of those calling for an end to the blockade. However, “we have to make sure that no weapons that could threaten Israel enter,” said the Chair of the EP’s Middle East Working Group, Hans-Gert Pöttering (EPP, Germany).

EP KEEN TO PLAY ROLE

MEPs were eager to increase the political impact of the EU in the process of the creation of two states. “The European Union must have a political role proportional to its financial contribution,” BUDG committee Chair Alain Lamassoure (EPP, France) said. One suggestion was for the EU to control the Gaza-West Bank passage point. Fayyad praised the Union’s growing role in the Quartet (EU, UN, US and Russia), highlighting the fact that its March 2010 statement followed closely the conclusions adopted by the Council in December 2009.

While Fayyad’s leadership was saluted by MEPs, there was concern that his approach was too focused on economic recovery.

Underlining the importance of the economic aspect, Fayyad said that in order to achieve independence, Palestinians need to be able to “stick around”. Thus, “an important part of what we do is to get ready for statehood by trying to complete the task of capacity building and institution building,” he added. “We cannot build upon the backdrop of a political vacuum.”

The issue of the conflict between Hamas and Fatah was also raised. Fayyad claimed that he was “completely open to discussion with everyone”. The current state of affairs is “disqualifying” in view of statehood, he added.

EP mission to Palestinian Territories

In late May a 15-strong delegation of MEPs visited Israel and the Palestinian Territories. The delegation comprised members of the Foreign Affairs, Development and Budgets Committees, together with the chairs of the Working Group on the Middle East and of the Interparliamentary Delegation for Relations with the Palestinian Legislative Council. Field visits to Ramallah, Nablus, East Jerusalem and Gaza were organised. The purpose of the visits was to look at EU-funded reconstruction efforts and assess the activities of the United Nations Relief and Works Agency (UNRWA) in the area.