Select Committee on European Union Twenty-Sixth Report


Towards a viable Palestinian state—the EU's role in capacity and institution building

118.  In addition to shaping the political conditions for the Oslo process to emerge, the EU's main contribution in the 1990s was, from 1995, to provide financial and technical assistance for the creation and functioning of the institutions of a nascent Palestinian Authority. This included support for the Legislative Assembly, elected in 1996, and encompassed a package of measures and instruments devoted to Palestinian state-building. The EU's infrastructural support and development assistance to the Palestinian economy have also been critical not only to developing Palestinian capacities to assume the eventual responsibilities of statehood, but has also led in the recent years of Israeli border closures and rising Palestinian unemployment, to the EU providing direct budgetary support to the Palestinian Authority from June 2001 until the end of 2002.

119.  This assistance ceased, abruptly, in the immediate aftermath of Hamas's winning a majority in the Palestinian Legislative Council in January 2006. In the summer of 2006, the EU created a Temporary International Mechanism (TIM) to channel funds to the Palestinian population to enable them to survive (see below).

120.  Despite the increase in overall financial assistance delivered to the Palestinians since the creation of the TIM, the EU has been blamed by both Palestinians and wider regional opinion for the Quartet's decision to suspend direct financial assistance to the Palestinian Authority. The EU was perceived to have even less political leverage over developments within the Palestinian Authority than before the boycott, and the earlier EU's state-building efforts have been largely reversed by the inability of public institutions to withstand the EU's withdrawal of funding. As a result, and despite the EU's increase in financial support, the inability of the PA to meet public salary bills and uphold public order, and the deterioration this has entailed in the living standards and day-to-day security of Palestinian citizens, has had a negative effect on the EU's standing with both Palestinians and the EU's Arab Middle Eastern partners.

121.  From 1994 to the end of 2005, the European Community committed approximately 2.3 billion Euros in assistance to the Palestinians (not counting bilateral assistance of EU Member States). The EU continues to be by far the largest aid donor to the Palestinian Territories, transferring over 680 million Euros in 2006. In 2006 188 million Euros of EU funds went through the TIM and, according to FCO Minister, Dr Kim Howells, approximately 900,000 persons will benefit directly from it (Q 320). The extent of this funding is well known to the parties. The Palestinian General Delegate to the UK said that since the Oslo process, the EU had paid half of the PA's budget in terms of infrastructural development as well as inducing reforms. (Q 77)

122.  Figures for the EU, both collectively and as individual countries are available, as well as those from the United States (see Box 11, below). But it is not possible to ascertain the total amount of aid which is going to the Palestinians overall, either in funds or in kind. Some funding from elsewhere is known, for example the agreement by the Arab League Summit in Riyadh to provide $55 million a month to the Palestinians, but the full extent of assistance from others, notably Arab countries and Iran, whether to the Palestinian Authority or to the various factions in the territories, is not publicly available. It has not been possible to ascertain the full extent of aid from Non-Governmental Organisations working on the ground. What is clear however is that the EU and its Member States have been given insufficient credit for the substantial and increasing sums disbursed to the Palestinians. In fact, EU aid per head to the Palestinians is one of the highest to any country.

123.  The EU seeks to control where its aid goes and to monitor expenditure but in the past the situation of violence in the territories and the absence of a fully functioning government has meant that it was not always possible to establish viable controls. EU officials know that there has been some corruption and that some aid has not gone to its intended purpose. Dr Kim Howells, Foreign and Commonwealth Office (FCO) Minister, described the misuse of funds in the past under Fatah rule (Q 333). David Quarrey of the FCO pointed out that the EU had suspended direct budgetary assistance to the PA before the 2006 legislative elections and the boycott, "precisely because of concerns about how the then Fatah-run P.A. was using some of those funds and our concerns about maladministration and so on" (Q 26). The Palestinian Delegate-General to the UK also admitted that there had been cases of misappropriation in the past (Q 100). But he also insisted that the lessons had been learned, while stressing the difficulties of building accountable state structures under occupation.

124.  There appears to have been an improvement over the last few years in the controls on international funding and a decline in corruption, although this is difficult to evaluate. Dr Ahmed Khalidi thought that for the past five years or so great efforts had been put into mechanisms for transparency and accountability (Q 71): he thought that very little EU or US money now went into private pockets.

125.  The EU was also involved in building closer relations with the Palestinian Authority. The Commission was one of the few donors to continue its assistance to the Palestinian reform process throughout the Intifada. The Action Plan which the Commission agreed with the PA under the European Neighbourhood Policy (adopted on 4 May 2005) sets out the main PA institution-building and reform priorities in the areas of the judiciary, rule of law, administrative capacity and public finances, but its implementation was suspended due to the boycott. However, the EC resumed direct technical assistance following the formation of the National Unity Government, but this may change given the events of June 2007 (see chapter 6)[25]. The Commission also made proposals in October 2005 on how the EU could contribute to making progress towards a viable Palestinian state, including[26]:

  • the negotiation of an Association Agreement with the Palestinians while working to ensure the full implementation of the EU-PA Interim Association Agreement;
  • that the Commission act as a "clearing house" for the coordination of EU actions and assistance; and that the Council consider the creation of an EU Agency for Reconstruction in Palestine.

The important EU role in coordinating aid to the Palestinians is further discussed in paras 142 and 143.

126.  The fact that the Presidency was not controlled by Hamas made it much easier for the EU and other donors to work directly with the Presidency. The EU provided support for the Central Elections Commission, the judiciary and the Palestinian Monitoring Authority (Q 356). However, Prof. Robert Springborg sounded a warning about Parliamentary oversight: the EU's aid never passed through the Palestinian Legislative Council but was provided to the executive branch essentially without conditions. (Q 124) Dr Youngs also thought that there was something "counter-intuitive" about going back to a situation where the EU favoured "a small clique of Fatah elites around the President's office" whose record on governance had been part of the reason why Hamas won the 2006 election. He warned against equating support for democratic reform with supporting the President or "our kind of moderate allies." (Q 124)

127.  One of the most frequent comments we heard was that the EU did not use the political influence it could have as the largest aid contributor to the Palestinians, and a substantial trade partner with Israel. Dr Richard Youngs felt that "the EU has failed to use its economic leverage … and its on-the-ground presence … built up through various aid initiatives … to try and nudge progress on the bigger final settlement issues." Prof. Robert Springborg thought that "the EU has gotten remarkably little for the money it has spent in Israel and Palestine … and it has done so with regard to both actors." (Q 124) His advice was to use the purse-strings to bring the two parties together in a balanced way whether "in the variety of agreements with the Israelis regarding access or with the Palestinians for budgetary support." The view was that the US ran the policy and the EU "signed the cheque". Dr Ahmed Khalidi told us "We have an EU that plays the role of financier … and it seems to be happy to leave the politics to the United States. I am convinced there is space for an EU role, a more robust political role …" (Q 43). "The economic role … seems to have been the dominant one and the one with the least return, it is taken almost for granted that Europe will pick up the cheque, and … that has to change." (Q 55)

128.  We believe that the EU's extensive budgetary assistance and humanitarian aid has been vital to the establishment and maintenance of Palestinian institutions and to sustaining the Palestinian people and this should be publicised both in the region and outside. The EU should continue to make every effort to monitor the distribution of its aid in difficult circumstances.

129.  The EU should link its financial and technical assistance more directly to its political goals and make that assistance conditional on progress in institutional reform in the Palestinian territories and in the peace process. The EU role is important to strengthening the Palestinians' capacity both to assume their responsibility for achieving peace and to enhance governance standards and accountability in the everyday lives of Palestinian citizens which is critical to public support for the objectives of peace.

The Temporary International Mechanism (TIM)

130.  With the election of the Hamas-led government, the Quartet ended aid to the Palestinian Authority government, but on 9 May 2006 addressed the humanitarian situation in the Palestinian Territory and asked the European Union to propose a "Temporary International Mechanism"[27] to set up a mechanism to facilitate needs-based assistance directly to the Palestinian people. The Commission's proposal was endorsed by the European Commission and the European Council on 16 June 2006 as well as by the Quartet on 17 June 2006.

131.  Generally speaking, witnesses felt that the TIM had worked well. According to Patrick Child, Chef de Cabinet to Commissioner for External Relations Ferrero-Waldner, the "TIM is effective and in fact is the only game in town as far as bringing much-needed support to the Palestinian people …" (Q 214) Michael Anderson of DFID praised the Commission for its high-quality work on the TIM, noting that its approach had been innovative, highly flexible, and extraordinarily quick. He stressed that the TIM was accompanied by some very tight control mechanisms. (Q 354)

132.  However, there was general agreement that the TIM is not a long-term solution to the humanitarian needs of the Palestinian population, nor a substitute for the resolution of the key political issues, such as the occupation, the partial withholding of Palestinian revenues by the Israeli Government and the boycott of the PA (Q 255; p 161). It is a "desperate measure" (Q 103) and a "drop in the ocean compared to the magnitude of challenges facing the occupied territories" (Q 120). For Patrick Child, "the sort of assistance we are providing through the TIM […] is manifestly unsustainable over the long term. The only sustainable solution is for Israel to open up the flows of tax revenues which are legitimately due to the Palestinian people and territories for their economic activity" (Q 194).

133.  The TIM has prevented a very serious humanitarian crisis from becoming even worse, and it has also contributed to preventing the collapse of the PA: "On the humanitarian side, it alleviated the suffering of the Palestinians straightforwardly by allotting immediate aid for them. Secondly, it prevented the political authority from collapsing […] [The] TIM has contributed immensely in alleviating suffering, particularly in the health sector, by providing essential supplies and non-wage current expenditures" (Q 103). This is not to say that the Palestinian administration has not been affected by the provision of funds outside the established channels, and Professor Manuel Hassassian stressed the need to make sure that the EU also deals with the Palestinian NGOs and institutions, "because part and parcel of the EU objective is to build institutions, capacity and institution building" (Q 101).

134.  We firmly support the Temporary International Mechanism (TIM) but believe that it has been no more than a stop-gap measure, whose usefulness must not conceal or delay the need to move as soon as possible to a situation where the European Union's resources go to properly constituted Palestinian governmental institutions. The TIM cannot be a substitute for more normal economic conditions, in particular free movement and access, and the full transfer of withheld Palestinian revenues by the Israeli government.

135.  The TIM should accordingly not divert the attention of the EU from the root causes of the insecurity and poverty in the Palestinian territories. The Commission is to be commended on the way in which it quickly set up the Temporary International Mechanism in response to the boycott of the Palestinian government and on its leading role in co-ordinating humanitarian aid, including from the Member States. We would encourage the Commission to continue to work towards the effective coordination of humanitarian aid with other donors, including Arab states and the United States.

136.  At an operational level, three important issues were raised by our witnesses: the scope of the TIM; the question of dependency; and financial controls to combat fraud. Professor Manuel Hassassian argued for the scope of the TIM to be extended to cover the wage bill of civil servants, pointing out that the current set-up is having incidental repercussions on the political side: "When we talk about 162,000 employees in the public sector, all of them are predominantly Fatah and not Hamas. The boycott has impacted on Fatah and President Mahmoud Abbas more than Hamas" (Q 104). Patrick Child pointed out that the scope of the TIM had already been extended several times into "new areas of activity" (Q 214), but the question is whether this is enough. Work is ongoing to develop a new "international support mechanism" with an integrated approach to improving governance and capacity-building, with a particular focus on accountability and transparency (QQ 214; 356). Some observers have criticised the fact that the wages of security forces are not being covered, which they see as a major factor of instability, but this was not a subject taken up in detail by our witnesses.

137.  Dr Richard Youngs agreed with the need to extend the scope of the TIM, but pointed out that the EU would have to tackle the problem of aid dependency, so as to "move back towards a situation where most of the help is focused on trying to help sustaining economic regeneration and […] away from the kind of short-term service provision" (Q 140). Currently, sustainable activity is simply not possible in the absence of a political settlement due to multiple restrictions on movement and the constant interruption of Palestinian economic life (Q 141).

138.  The TIM is less prone to corruption because it is an international mechanism which provides aid directly to Palestinians outside the governmental structures. Several witnesses expressed confidence about the correct use of TIM funds and explained that tight controls are in place to prevent the misappropriation of funds. Hans Duynhouwer, Head of Middle East Unit, EuropeAid in the European Commission took time to explain that a great deal of attention had been paid to control measures, and gave some practical examples of measures that are currently in place (Q 214). The Commission has worked closely with an international auditing firm on the delivery of fuel to the Gaza power plant on the basis of agreed audit plans starting from the delivery up to the payment, providing a very high level of assurance. Similarly, concerning the payment of social allowances an international audit firm has been asked to carry out "all sorts of checks—ex ante, ex post—in terms of beneficiaries." (Q 214)

139.  Michael Anderson of DFID described the mechanisms of transparency and accountability, including five checks on every individual payment, in the TIM, as "unparalleled in the aid world", as far as he was aware (Q 354). It was of the utmost importance that the very rigorous measures for monitoring the expenditure were maintained. Michael Anderson also described the EU's monitoring of Palestinian school text-books for their content when evaluating aid distribution. (QQ 347, 354) The Committee had received written evidence from Palestine Media Watch about this point (pp.156-161) which was a matter of concern. He also described the ways in which the EU is seeking to channel funding. (Q 354)

140.  Hans Duynhouwer mentioned that the Commission has been working through an international bank, which is responsible for checking compliance with various regulations in terms of fraud, money laundering, et cetera, and this provided "a very high degree of assurance" (Q 214). Furthermore, payments are made directly into the bank accounts of beneficiaries, and where they do not have a bank account, claimants are required to show proof of identity.

141.  We support the European Commission's plans to establish a successor mechanism to the TIM, even though the events of June 2007 re-opened the question of how EU funding mechanisms would evolve. In the meantime it will be important that aid should be available to Palestinians in all the occupied territories. Strict guarantees should be provided that funds will not be diverted to purposes other than those for which they are intended and, over the longer term, particular attention should be paid to reducing the aid dependency of Palestinians.

Coherence and coordination of EU aid

142.  One problem described in the evidence was the lack of coherence between the aid provided by the Commission and by Member States, particularly since the Commission and the Member States have signed the 2005 Paris declaration on aid effectiveness which set standards on coordination and harmonisation. Mr Anderson had high praise for the way in which the Commission had taken a strong leading role in trying to encourage more harmonised aid (Q 357) but he described the frustration at the lack of progress compared with many of the programmes and countries where the UK provides assistance. He ascribed the reasons to domestic political pressures in most donor states to have their own programmes labelled as such[28]. The EU was working to co-ordinate more closely with Arab donors and had held a meeting on 4 February 2007 of European and Arab donors to establish better means of communication on objectives and assistance for co-ordinating. (Q 360)

143.  Prof. Robert Springborg thought that Palestinians, when looking for aid partners, rarely looked to the EU, but rather to individual European Member States or to the US—which he described as "shopping around". "The donors themselves have failed to establish a mechanism between themselves on the one hand and the Palestinians on the other. It is essentially a chaotic situation … of donors looking for activities to support and those who would be involved in the activities looking for donors. The consequence is … that the aggregation of these particular projects amounts to very little … They are one off projects not integrated into a broader strategy". (Q 136) On the other hand, Prof. Robert Springborg thought that European actors have tended to keep one another informed of joint projects outside the structure of the EU which are arranged on a bilateral and multilateral basis between European countries, and through regular donor meetings[29]. (Q 137)

The European Security and Defence Policy (ESDP) missions

144.  Towards the end of 2005, the EU adopted Joint Actions setting up two ESDP missions in the Palestinian territories: the European Coordinating Office for Palestinian Police Support (EUPOL COPPS), and EUBAM Rafah, a border assistance mission (see Box). Arguably, their symbolic and political significance has outstripped their operational impact. The boycott of the Palestinian Authority resulted in the suspension of EUPOL, and the EUBAM border assistance mission has been severely curtailed due to the closure of the Rafah crossing point for 80% of the time since June 2006[30] (p 140). However, the acceptance by the parties of a limited security role for the EU is a significant political breakthrough (Q 9), showing the growing trust placed in the Europeans in this very sensitive area, especially by the Israelis.

BOX 13

145.  These two missions should be seen in the context of the overall EU strategy for political engagement in and practical assistance to the parties to the MEPP. Their overall goals are to contribute to confidence-building and the implementation of agreements between the parties, especially the Agreement on Movement and Access of November 2005 in the case of EUBAM; and to build the capacity of the Palestinian administration to manage its own security challenges.

146.  However, one question that arose was what the missions could achieve under conditions of occupation and in the absence of a coherent overarching framework for building up a viable and democratic Palestinian state. Dr Richard Youngs and Prof. Robert Springborg were particularly critical of the missions. Dr Youngs expressed the strong view that such small-scale missions would have no impact unless they were linked to a high-level political engagement (Q 117), as otherwise they would simply amount to token gestures. This position was echoed by Dr Ahmed Khalidi who emphasised the importance of the EU speaking out on issues of substance, remarking that: "I do not think that our main problem is that of not having enough policemen" (Q 55).

147.  A related point made by several witnesses was that attempting to build a democratic and viable Palestinian state is a difficult or even impossible task under conditions of occupation, and therefore the EU's operational missions can in any case only achieve as much as the political and security conditions allow. The Palestinian General-Delegate to the UK Professor Manuel Hassassian stated that the occupation was the key factor hindering progress, arguing that: "The occupation has played a detrimental role. We cannot undermine the fact that the Israelis have not been very helpful, cooperative or happy to see the involvement of the Europeans in building capacity for the Palestinians. The intention of the Israelis is still not to have an independent Palestinian state" (Q 107).

148.  However, Dr Richard Youngs recognised that there is a two-way relationship between the occupation and the reform of Palestinian institutions: "[…] one cannot not have a fully functioning, democratic Palestinian state until occupation is ended, so that is still the big issue, and that focusing and pressing on issues of corruption, for example, should not be a kind of pretext for taking the critical spotlight off occupation, but, on the other hand, I think the EU did realise that neglecting issues of underlying reform was itself militating against the prospects for longer-term peace […]" (Q 124) Seen from this angle, the yardstick of success for the ESDP missions is whether they can improve the conditions for peace despite being caught up in the fluctuating dynamics of the conflict.

149.  In contrast to the sceptical views outlined above, several witnesses were very positive about the ESDP missions, especially Palestinian General-Delegate Professor Manuel Hassassian and Ambassador Madi of Egypt. Professor Manuel Hassassian said: "In all fairness, all those missions that have been dedicated to work in helping the Palestinian people in their infrastructural development, in their capacity building, in the development of their human resources, have been very efficient" (Q 107). This was echoed by Dr Kim Howells, who took the view that the missions have "proved to be effective instruments" (Q 320).

150.  Ambassador Madi was unequivocal about the success of EUBAM: "We look at it as one of the most important roles played by the Europeans so far. Why? For many years we were asking for a European presence in the Palestinian-occupied territories, presence in the form of monitoring the situation. I have to go back every time to how we look at the European role as an honest broker, because, this is why we are in favour of a European presence on the ground […] We hope that this role can be expanded further and the Europeans can play more of a role inside the Palestinian territories, whether in the monitoring or any assignment which would be accorded to the Europeans in the future" (Q 166). This positive evaluation was echoed by UNRWA, which underlined the critical contribution of EUPOL and EUBAM in facilitating movement in and out of Gaza, essential for economic and social recovery (p 161).

151.  EUPOL COPPS, which started out as a UK programme, failed to get off the ground in early 2006 because of the boycott of the Palestinian government. Dr Richard Youngs said it had showed great potential and felt that it had been disappointing to see it rendered inoperative: "It is often asserted that the EU has had more of a focus on genuine underlying reform of the security sector and does talk about the need to strengthen civilian control over security forces over the need to help create a single security service, and that contrasts with the US approach where we know that the US has approved quite large funding directly for the presidential guard" (Q 128).

152.  Despite the EU's attempts to link security assistance to the strengthening of the rule of law, Dr Richard Youngs highlighted some weaknesses in the EU's approach, noting that most of the aid had gone to the provision of hardware, such as anti-riot equipment, rather than being directed at more fundamental reform issues (Q 128). He criticised the EUPOL mission for its tendency to increase factionalism, as there was a perception in the Palestinian territories that the EU was "helping to try and quash Hamas more than giving Hamas a legitimate stake in the provision of security" (Q 128).

153.  We believe that work to set up EUPOL COPPS should resume when conditions allow, but it should be re-oriented and strengthened. The EU must address the weaknesses of EUPOL COPPS. In particular, the mission must focus on capacity-building and reform rather than equipment, and should strengthen rather than weaken the rule-of-law. Coordination with other operational actors and donors also appears to be an area of concern.

154.  The partial success of the EU's operational missions, as well as the high-profile contribution of EU Member States to the UN mission in Lebanon (UNIFIL II) raises the question of whether the EU could play an operational role in the framework of a future peace settlement, in a monitoring or peacekeeping role. Several witnesses were positive about this idea (Q 166). Yossi Mekelberg was particularly enthusiastic about the prospect for such a role, given recent experience in Lebanon: "in Lebanon, the deployment of a multilateral force is a change […] The multilateral [force], of now almost 12,000 in Lebanon, […] changed the perception actually that [a] multilateral, including a European force, can serve as peace-keepers … there, and it can set a precedent, an important precedent, as far as agreement with the Palestinians is concerned" (Q 58).

155.  We believe that discussions with the parties to the conflict and the members of the Quartet should commence with a view to identifying whether the EU may be in a position to support a peace settlement through the deployment of a peacekeeping mission. In the light of these discussions, the Council of the EU could consider undertaking scenario development and planning work for a possible EU operational mission to the Palestinian territories.

The Euro-Mediterranean Partnership and European Neighbourhood Policy

156.  The Euro-Mediterranean (Euro-Med) Partnership was launched in 1995, in part as an adjunct and support mechanism for the Oslo peace process then taking place between Israel and the Palestinians (Youngs, Q 116). The Euro-Med's political focus stopped short of entering into the details of the continuing conflict, but sought to support peace-building efforts by seeking to build regional integration, including through the promotion of a Mediterranean Free Trade Zone by the year 2010. Unfortunately, this skirting around of the core issues has led, in the words of Mr. Quarrey of the FCO, to "a rather sterile debate around issues to do with Israel-Palestine" and an ineffective way of making the Euro-Med Partnership contribute to the MEPP (Q 33). In the views of Professor Manuel Hassassian and Ambassador Madi, the Euro-Med Partnership also failed because the EU lacked more of an assertive political role in the peace process (QQ 106, 163).

157.  The regional aspirations of the Euro-Med Partnership also suffered from the stalling of the Oslo Peace Process, and the subsequent suspension of direct peace negotiations. At the tenth anniversary of its launch in Barcelona in 2005, only one Arab head of state attended the official summit (Youngs, Q 132). Yet, as Ambassador Eran notes, the Euro-Med Partnership remains the only regional forum in which Israelis and Arabs have continued to meet, even at the height of bilateral tensions (Q 313). Sir John Sawers also observed that the tenth anniversary summit also changed the direction of the Barcelona Process towards increasing the proportion of EU funding spent on good governance, education and private sector reform, from 25% of the budget to 50% projected for 2007 to 2010 (Q 32).

158.  The European Neighbourhood Policy (ENP) has emerged as a different type of instrument, based on deepening the EU's bilateral relations with neighbouring states with few or no prospects of joining the EU in the near future, and partly as a means of using the bilateral approach to overcome the blockages inherent in region-wide policies exemplified by the Euro-Med Partnership (Youngs, Q 146). The 'ENP Action Plans' bilaterally negotiated by the EU with each partner also carry the advantage of bringing the political and economic instruments of the EU closer together under the Commission, which is thus able to create approaches better tailored to the individual circumstances of each partner (Dr Eran, Q 313).

159.  In respect of the MEPP, David Quarrey of the FCO said the ENP has greater potential than the Euro-Med Partnership to engage the desire of both Israel and the Palestinians to normalise their relations with the outside world (Q 33). If the tools of the ENP are used creatively, this broader goal of normalisation could be used both as a lever and as an incentive to both sides to re-engage in peace. To date, however, the Action Plan negotiated with the Palestinian Authority has not been implemented, due to the EU's suspension of relations with the PA government (Mingarelli, QQ 207, 208). However, Dr Youngs—speaking before the formation of the NUG—said that if a unity government was formed and the EU was able to engage with it, the ENP could provide the EU with the possibility of offering new inducements to both Fatah and Hamas to move in the direction of peace (Youngs, Q 146).

160.  The lower level of the Commission's direct financial assistance to Israel lessens the opportunities for it to use development assistance as a lever over the direction of Israeli policy. However, the significant increase in bilateral cooperation taking place under the EU's Action Plan with Israel has opened the way for more opportunities for the Commission to exercise its political as well as economic influence (Youngs, Q 146) (See Chapter 3). Dr Jana Hybášková referred to several relevant examples in this respect (Q 231).

161.  We believe that while the Euro-Med Partnership has been useful in the past, it is now the European Neighbourhood Policy (ENP) that can make a contribution to developing relations with the parties to the MEPP. The advantage of the ENP is that it allows the EU to develop bilateral relations which are suited to each individual partner country. Progress made by each country is not dependent on progress made by other countries. Under the ENP, the EU offers various financial and other incentives to support the implementation of each country's Action Plan.

25   See also footnote 8 at para.36. Back

26   Communication from the Commission to the Council and the European Parliament "EU-Palestinian cooperation beyond disengagement-towards a two-state solution" ref. COM(2005) 458 final, Brussels 5 October 2005. These proposals were the subject of an exchange of correspondence between the EU Committee and the Minister for Europe at the FCO (see letter from Douglas Alexander MP, Minister for Europe, dated 29 November 2005-Please see appendix 6 for this correspondence). Back

27   Source: EU Fact Sheet on the TIM. Back

28   The UK had been evaluated by the OECD to be among the best donors at not labelling aid as the UK's and for being co-ordinated with others and in the Palestinian area more than 90% of UK aid was spent in co-ordinated ways (Q 359). Back

29   The European Union is closely involved in the main international donor coordination structures for aid to the Palestinians, and plays a leading role in several of them. At the strategic level, the EU is a co-chair of the Ad-Hoc Liaison Committee (AHLC). This forum is a 12-member committee that was set up in 1993 as a result of multilateral talks, and serves as the principal policy-level coordination mechanism for development assistance to the Palestinian people. The EU also co-chairs the Governance Strategy Group (p 139). Back

30   Coinciding with the kidnapping of an Israeli soldier and the launching of Israeli incursions into Gaza. Back

31   The information in this box is taken from EU fact sheets posted on the Council website. Back

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