11 December 2013 – Brussels – The AJC Transatlantic Institute is concerned by the European Court of Auditors report calling for an "overhaul" of EU oversight for its Pegase Direct Financial Support Program to the Palestinian Authority (PA).

“The fact that the EU, the largest donor to the Palestinians, does not have sufficient monitoring mechanisms in place is highly troubling,” said Daniel Schwammenthal, Director of the AJC Transatlantic Institute in Brussels. “The EU must launch a full, in-depth inquiry into the PA financial abuses and implement the necessary safeguards, for the sake of the EU tax payer, the Palestinian people and, most of all, the peace process.” The Court of Auditors criticized that the EU has not adequately addressed “the specific risks of corruption.”

In addition, EU aid “is provided to the PA without conditionality,” thus reducing “the potential leverage its (the EU’s) considerable funding could give it to push for more reforms from the PA.” What’s more, the EU Auditors criticized the “considerable number of civil servants” who were receiving salaries without actually working, urging this practice to stop. Most disturbing, the EU auditors pointed out that while Pegase funds go to “eligible beneficiaries,” the EU “has not paid sufficient attention to the fungibility of the funding provided.”

“In other words,” Schwammenthal said, “EU aid has freed up the PA’s own budget for funding that runs counter to the EU’s goal of promoting democracy and peace.”

Earlier this month, the Dutch Parliament passed a motion, by an overwhelming majority, condemning regular PA payments to reward convicted terrorists. It referenced how monthly payments to Palestinians in prison can range from €282 for someone jailed for less than three years to €2,419 for a sentence of 30 years or more, thus encouraging future crimes.

“The continuation of a culture of exploitation with no one held accountable, will only fuel the voice of extremism and harm the long-term goal of achieving peace with Israel,” said Schwammenthal. A June 2013 survey by the Palestinian Center for Policy and Survey Research found that 76.8% of those Palestinians polled, including 80.1% in the West Bank, believe there is corruption within PA institutions.