European Court of Auditors finds no Evidence of Corruption in Aid to Palestinians

BRUSSELS, December 11, 2013 (WAFA) – The European Court of Auditors (ECA) said Wednesday that there was no evidence of corruption or mismanagement in the European Union’s (EU) Direct Financial Support to the Palestinian Authority (PA) through the PEGASE Mechanism.

The European External Action Service (EEAS) and the European Commission (EC) welcomed the ECA report, “in particular the Court’s conclusion that the Commission and EEAS have succeeded in implementing this support in spite of difficult circumstances and PEGASE has the confidence of Member States, 16 of whom have contributed to it, together with Switzerland and Japan,” according to a memo by the EC.

The PEGASE Mechanism is accompanied by an extensive set of verification measures, which the Court itself described as robust, also recognizing that the funds channeled through PEGASE are reaching the intended beneficiaries, said the EC memo.

“Co-operation with the Palestinian Authority takes place in very particular circumstances, in the context of Israeli occupation, with an Authority which does not have the powers of a state government  and where  part of the Palestinian territory, the Gaza Strip, is run by de facto authorities with which the EU has no relations,” it said.

“By helping the Palestinian Authority to meet its wages and pensions bill for essential service providers and pensioners, and pay for social allowances to most vulnerable groups, the EU is making a tangible contribution to the preparation for a two-state solution to the Israeli-Palestinian conflict,” said the EC.

The report makes a number of recommendations on how to improve EEAS and EC co-operation with the PA.

“The Commission and the EEAS agree to review the PEGASE mechanism and take the recommendations made by the Court into account,” said the memo, adding that some of these recommendations are being implemented.

“Both institutions already review the mechanism on a regular basis, taking account of changes on the ground (for example discontinuing one component on fuel deliveries to the Gaza Power Plant and adding others as circumstances change – Private Sector Reconstruction in Gaza following Operation Cast Lead and more recently support to East Jerusalem hospitals),” it said.

Based on an assessment carried out in 2011, the Commission started providing in 2013 a comprehensive support to the PA for Civil Service Reform, an issue raised by the Court.

The EC said performance indicators will be introduced in the areas suggested by the Court, bearing in mind that many of the elements required to fulfill these indicators lie partly or wholly outside  the control of the Palestinian Authority.

“The Commission and the EEAS do not consider strict conditionality to be desirable or effective in these circumstances. Ultimately sustainability of the  EU’s assistance in this field can only be ensured by political progress on intra-Palestinian reconciliation and, above all, by an end to the Israeli occupation,” it added.

On the issues surrounding the civil servants who are not able to work in Gaza are complex in the circumstances prevailing in the Gaza Strip, the Commission and the EEAS said they consider that “the PA must continue supporting its workers in Gaza as a key element of maintaining its presence in Gaza and the unity of a future Palestinian State.”

The Commission and the EEAS also said they believe that the delay in salary payments on a number of occasions by the PA in 2012 was due to the overall financial difficulties of the PA and not to the number of eligible beneficiaries under PEGASE, nor to lower contributions from Member States.