Amidst Europe's worst economic crisis in recent memory, the European Parliament (EP) has just decided to raise Europe's aid to the Palestinians by €100 million - 30 percent more than previous years.
At the end of tough negotiations among the European Union's institutions over the 2012 budget, the EP somehow made room for an additional €18 billion over the €129 billion cap imposed by expenditures-wary EU member states. Among the additional line items is that extra €100 million for the Palestinians.
An extra €100 million may not seem like that much compared to an overall budget of €147 billion for 2012, but it cannot be ignored that this is money the EU does not have. Moreover, the EU is pledging taxpayer money at a time when the only guarantee it will be spent responsibly has just disappeared.
The EU budget decision was sealed just days before a highly anticipated summit between Palestinian Authority president Mahmoud Abbas and Khaled Meshal of Hamas – a designated terrorist group in the EU. The two factions have been in a state of a low-level civil war since 2007, but agreed on Thursday to set a date for elections that would begin to end their feud.
According to reports in the Palestinian press, the two Palestinian rivals have not yet decided on their choice for the new premier. But their four likely choices look poor, ranging from Hamas loyalist Jamal al-Khodary to Mohammed Mustafa, the economic advisor to Mahmoud Abbas who has played a leading role in the creation of the ossified Palestinian political system.
No matter who is named, it will mean the end of Salam Fayyad – the moderate Palestinian Prime minister and former World Bank official who, thanks to his views, credentials and sound management, temporarily restored credibility, transparency and due diligence to Palestinian governance.
In other words, the EU investment is likely to backfire, and not for the first time.
The EU has been a financial backer of the Palestinian cause since 1971, when its institutional predecessor, the European Community, started funding The United Nations Relief and Works Agency (UNRWA), the UN agency in charge of underwriting Palestinian refugees and their descendants.
UNRWA is a bottomless pit of international aid – designed to keep Palestinian refugees in limbo, rather than resettling them, as the UN has done for every other displaced population in history. UNRWA is a waste of money by definition, even under the most stringent accountancy standards, since its raison d'être is to perpetuate the Palestinian refugee problem instead of solving it.
EU support dramatically increased in 1994, when the signing of the Oslo Accords seemed to offer a promise of Palestinian-Israeli peace, with huge sums ploughed into Palestinian state-building. From its outset, the Palestinian Authority was rife with corruption and wastefulness, but the wastefulness never drove off donors.
From 1994 to 2009, the EU donated €4.26 billion to the Palestinian Authority through various channels – and this figure does not take into account individual EU member states' donations to the PA.
A 2005 investigation launched by OLAF, the EU anti-fraud office, into allegations of misuse of funding by the PA to support terrorist activities found "no conclusive evidence of support of armed attacks or unlawful activities financed by the European Commission's contributions to the budget. However, the possibility of misuse of the Palestinian Authority's budget and other resources cannot be excluded, due to the fact that the internal and external audit capacity in the Palestinian Authority is still underdeveloped."
Rather than suspending its financial support, the EU responded by continuing to contribute substantial sums to the PA budget, even after Hamas – the Palestinian branch of the Muslim Brotherhood known best for its suicide attacks and other violent acts against civilians – won the 2006 Palestinian parliamentary elections and briefly took over the PA government before the 2007 Palestinian civil war left Hamas in control of Gaza while PA President Mahmoud Abbas clung to power in the West Bank.
This time, at least, the EU made an effort to improve Palestinian governance, and began to exact more stringent conditions and guarantees for the use of EU funds. It also established an institution now based in Ramallah (EUPOLCOPPS) that, among other things, helps training law enforcement agencies' personnel in anti-corruption practices.
In recent years, despite the fractured Palestinian political landscape, the first and last line of defence for Palestinian financial transparency has been Prime Minister Fayyad.
If Fayyad stays on as finance minister, he will no doubt attempt to enforce the practices of good governance and transparency that has earned him accolades in the West. However, there is no avoiding the fact that a unity government will represent an unpalatable marriage between Hamas and its jihadi ideology, and Fatah, replete with corrupt autocrats who have squandered international donor funds for years.
In a year of austerity, when European citizens must make additional sacrifices to avoid bankruptcy caused by reckless spending, opaque accounting practices and corrupt wastefulness, it is not too much to ask that public monies be pledged only against guarantees of nonviolence and good governance.
The coming Palestinian unity government promises to fall short on both counts. Why should Europe's tax payers increase their pledge?
Emanuele Ottolenghi is a Senior Fellow at the Foundation for Defense of Democracies (FDD); Jonathan Schanzer is the Vice President for Research at FDD