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Barcelona Process and Assistance to Palestinian Society

Barcelona Process and Assistance to Palestinian Society

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European Standing Committee B

Wednesday 23 January 2002

[Mr. David Amess in the Chair]

Barcelona Process and Assistance to Palestinian Society

[Relevant documents: European Union document No. 5330/01, Audit of management of external aid programmes; European Union document No. 7131/01, Euro-Mediterranean co-operation on transport and energy; and Unnumbered Explanatory Memorandum dated 24th April 2001 submitted by the Department for International Development on Council Conclusions on ECA Report on assistance to Palestinian Society.]

10.30 am

The Chairman: Two Ministers are present, but I understand that only one of them intends to make an opening statement. I call Mr. Hilary Benn.

The Parliamentary Under-Secretary of State for International Development (Hilary Benn): Thank you, Mr. Amess; I am glad to see you in the Chair this morning. I hope that the Committee will enjoy the fact that it has two Ministers for the price of one.

The first document to which the motion refers is the Commission communication, ''Reinvigorating the Barcelona Process''. The Government welcomed that communication. It provided an analysis of the five years since the Barcelona declaration in 1995, and suggested useful ways forward.

I turn first to what I believe are the achievements of EuroMed. The European Union is close to concluding association agreements with all the Mediterranean partners, and it continues negotiations with Syria. Even in areas of trade that are traditionally protected by the EU, we have opened our markets to our Med partners. Last year saw the agreement of further agricultural liberalisation with Tunisia, a similar agreement is being negotiated with Israel, and I hope that the EU will soon begin negotiations with Morocco. Furthermore, the EU/Lebanon association agreement provides more liberal access to the EU market for Lebanese agriculture.

Multilaterally, the Barcelona process continues to take small but useful steps. Since the November 2000 Marseilles conference, when Syria and Lebanon stayed away in protest at the situation in Israel, officials from all 27 partners have met regularly. The last meeting of Foreign Ministers in Brussels in November 2001 saw ministerial attendance from all partners. Against the backdrop of the previous year's boycotts, that was an achievement. The Barcelona process remains the only instrument where representatives from Israel, the Palestinian Authority and the Arab nations meet regularly to discuss issues of mutual interest.

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However, there are areas where progress has been less good. Ratification of the association agreements is slow, and we need to ensure that such agreements receive parliamentary scrutiny without inordinately delaying ratification. The Government therefore support the Commission's request for ratification of agreements within two years of signature.

The charter for peace and stability remains an aim rather than one of the achievements of the Barcelona process. The European Scrutiny Committee asked whether such a charter was over-ambitious. Perhaps it was, but it was worth a try and the partnership can return to it when the time is right.

Overall, the Government believe that the Barcelona process continues to play a useful function in bringing the various parties in the region together. Progress has inevitably been faster in some areas than others, but as the EU's experience shows, enhanced economic co-operation can create prosperity and foster security.

The second document to which the motion refers is the special report by the Court of Auditors on the management of EC assistance to the Palestinians. The United Kingdom welcomes that assistance, which is an important component of a broad international effort. It includes bilateral support from a number of member states, the World Bank and the International Monetary Fund.

The complex and volatile political situation has created a difficult working environment for international donors, including the EC. However, support must continue in response to the worsening social and economic conditions caused by the current crisis. The proportion of the population living below the poverty line has risen during the intifada from 21 per cent. to 35 per cent. The Palestinian economy shrank by 8.2 per cent. in 2000, and unemployment has risen from a low of 10 per cent. in September 2000 to more than 28 per cent.

About one third of my Department's funds are directed to the EC, and that UK contribution forms about 19 per cent. of its aid budget. We therefore have a strong interest in ensuring effective EC support for the Palestinians. We fully endorsed the Court of Auditors report and the resultant comprehensive programme of reform, which began last year and is continuing. Those reforms include focusing on poverty reduction and creating more streamlined structures and better management arrangements, but improving the quality of staff and progressing delegation, both of which are crucial, will require more time. We shall monitor progress closely, working with the Council, the Commission, the European Parliament and other member states to ensure its success.

In conclusion, the UK Government are firmly committed to both the Euro-Med process and the EC's programme of assistance to the Palestinians. Ensuring the effectiveness of both is a high priority, which we take seriously and will continue to work to achieve.

The Chairman: We now have until 11.30 for questions to Ministers. I remind hon. Members that they should be brief, and should be asked one at a time. There is likely to be ample opportunity for all hon.

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Members to ask several questions. It will be for the Ministers to decide which of them should respond to each question.

Roger Casale (Wimbledon): I welcome my right hon. Friend's remarks, and the continued support that the British Government is giving to efforts by the European Union to deliver aid to the Palestinian Authority. Does he agree that although there are difficulties in delivering that aid, not least because of problems with the management structures and with the political situation, it is more important than ever that we reinforce our efforts to underpin the Palestinian Authority, as a critical element in our attempt to stabilise the current crisis in the middle east?

Hilary Benn: I agree with my hon. Friend. The additional support that the Palestinian Authority is receiving is, in part, to compensate for the withholding by Israel of the tax and customs revenues that would otherwise be due to the Palestinian Authority. The documents before the Committee demonstrate the importance of the programme, which was also recognised by the Court of Auditors. There is also a recognition that, as with a number of EC aid programmes, there have been problems in delivery. This is a matter on which there is agreement across the parties, and we are working hard to improve things. The support that is being given to the Palestinian Authority by the EC and the multilateral agencies, the work funded by the United Nations Relief and Works Agency and our small bilateral programme are all designed to try to improve the capacity of the Palestinian Authority and to improve its structure so that it can spend support money effectively, while recognising that its circumstances could not be more difficult.

Richard Burden (Birmingham, Northfield): Has my hon. Friend seen yesterday's Financial Times article about EU aid and what has happened to it? I should like to alert him to three short extracts from it. The article says:

    ''The Israeli army has inflicted at least 20 million euros—£12.3 million—of damage on projects financed by the European Union in the Palestinian-controlled areas, according to statistics collated by member states and the Commission.''

It goes on to say that that involved

    ''destruction of parts of Gaza International airport and the bulldozing of greenhouses . . . shelling schools and wrecking irrigation systems,''

and states that

    ''EU officials will today decide what measures, if any, they will recommend foreign ministers take when they meet next Monday in Brussels. So far, apart from unofficial complaints to the Israeli foreign ministry, there is no consensus, let alone any real push by member states to demand that Israel pay compensation over what amount to projects paid for by the European taxpayer.''

Will my hon. Friend comment on that report, on the damage that has been done and on what we are doing, collectively and individually, about the fact that good projects, funded by money given for good reasons, are being destroyed by military action?

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The Minister for Europe (Peter Hain): I am glad that my hon. Friend has raised the matter, which is of concern to the whole Committee. I understand from reports, not least in this morning's papers, that some £11 million worth of European funded property in Palestine has been destroyed, including a school building, an airport, a seaport, broadcasting studios and an irrigation scheme. I cannot but agree with the European Commissioner, Chris Patten, who is reported as having said that he was ''shocked and astounded'' at what was happening, and added:

    ''We ask whether it really contributes to security if everything we try to support with EU assistance is destroyed.''

We share that concern expressed by the European Commissioner. We are very worried. There is no way in which the obliteration of much needed infrastructure of that kind, provided with taxpayers' money from Britain and other European states, could contribute to additional security and stability in the region.

On the other hand, the situation is so fraught that yesterday a gunman opened fire in central Jerusalem's main shopping area, wounding more than 20 people. Six Israelis were killed in the banqueting hall attack during a bar mitzvah last week. Mahmoud al-Zahar, a senior political member of Hamas, has issued this warning:

    ''We have entered a new phase that will reach every Israeli everywhere.''

Tit-for-tat violence is running away with itself, so while we join the European Union in condemning the destruction of European Union-funded infrastructure, we must also work hard, recognising that the terrorist attacks on Israelis are creating panic and producing the over-response. That response is perhaps understandable. What would happen if a gunman went loose in Oxford street? There would be calls for revenge, whether justified or not. We must work to re-establish peace in the area.


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