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Last Updated: Wednesday, 11 April 2007, 15:12 GMT 16:12 UK
Palestinians press EU for funds
By Oana Lungescu
BBC News, Brussels

Salam Fayyad and Benita Ferrero-Waldner
The EU says it is supportive of Palestinian reform efforts
The Palestinian finance minister has urged the EU in Brussels to resume financial aid as the new unity government faces a funding crisis.

Salam Fayyad said his government needed one billion euros ($1.3bn) in aid.

The European Commission offered technical assistance, but said it needed more time to decide whether it could resume financial aid.

The EU provides humanitarian aid to the Palestinians but suspended direct aid to the Palestinian Authority last year.

The embargo followed the election of Hamas, which it regards as a terrorist organisation.

Cautious approach

Mr Fayyad, on his first trip abroad, said the new unity government was going through a very acute financial crisis, with the government operating on just a quarter of the funds it needs for this year.

The Palestinians do not aspire to be a beggar nation, Mr Fayyad said.

He said the assistance was necessary for Palestinians to get back on their feet.

For now, all the European Commission is offering is technical expertise, to ensure the finance ministry works in a more transparent and accountable way.

While the EU clearly supports the reforming efforts of Mr Fayyad, a former International Monetary Fund official, European Commissioner for External Affairs Benita Ferrero-Waldner made it clear that direct aid would not be resumed overnight.

It is a cautious approach endorsed last month by EU foreign ministers, who said they would keep up contacts with moderates such as the finance and foreign ministers, but would continue to assess the Palestinian government on its deeds.

Mr Fayyad is next going to Norway, the first European country to have recognised the unity government, and then to Washington, where he will attend the spring meeting of the International Monetary Fund.

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