The U.S. Policy Toward Arafat and Iraq

In the eyes of the Bush Administration, Yasser Arafat has been a monumental failure as leader of the Palestinian people and a huge disappointment to the international community. Instead of promoting peace and economic reform, Arafat's Palestinian Authority (PA) has supported terrorist organizations and actions and has fostered an environment of conflict, fear, intimidation, and poverty in which the rule of law is nonexistent and corruption is endemic. Intelligence information linking Chairman Arafat with a payment of US$20,000 to the al-Aqsa Martyrs Brigade, a faction of the Fatah movement that he founded, made it impossible for the United States to continue to recognize his leadership.6

The White House has emphasized that there is very little hope for real progress toward the creation of a democratic Palestinian state until there is a change of leadership and a new beginning for the Palestinians. In his June 24 speech, President Bush stated that

a Palestinian state will never be created by terror--it will be built through reform. And reform must be more than cosmetic change, or veiled attempts to preserve the status quo. True reform will require entirely new political and economic institutions, based on democracy, market economics and action against terrorism.7

U.S. efforts to promote peace in the Middle East, however, have been overshadowed by the growing danger posed by Saddam Hussein and his regime in Baghdad, which threatens to destabilize the entire region. President Bush has made it clear that he supports a regime change in Iraq, a policy that has been forcefully backed by Secretary of State Colin Powell8 and by all six Joint Chiefs of Staff.9 It is expected that military action to remove Saddam Hussein from power is forthcoming.

Baghdad continues to threaten the security of the free world through the production of weapons of mass destruction and has stepped up its attempts to inflame the conflict in the Middle East by subsidizing Palestinian suicide bombers and supporting terrorist organizations in the region.10

Chemical and biological weapons produced by Iraq pose an immediate threat. Testifying before the Senate Foreign Relations Committee, Richard Butler, the former head of the United Nations weapons inspection team in Iraq, warned that Iraqi scientists are developing deadly plague viruses, including Ebola, in underground laboratories.11 A British government dossier circulated to Prime Minister Tony Blair and his Cabinet has warned that Saddam Hussein is planning to arm Palestinian terrorist organizations with biological weapons to strike against U.S. or Israeli targets.12

There is also mounting evidence that Iraq is trying to procure special equipment used in the production of fuel for nuclear weapons,13and it is believed that Baghdad may have nuclear weapons capability within three years. Khidir Hamza, an Iraqi scientist who played a key role in Saddam Hussein's nuclear weapon program, has predicted that Iraq will have enough weapons-grade uranium to produce three nuclear bombs by 2005.14

Clearly, the evidence is growing that the United States and the international community can no longer ignore the threat posed by Iraq and Saddam Hussein's regime to regional and international security.

The U.K. Position

Because Great Britain is America's leading ally in the international war on terrorism, its Middle East policy is of particular importance for U.S. policymakers. The British Prime Minister has been at the forefront in supporting the Bush Administration's warnings regarding the threat to global security posed by Saddam Hussein's growing arsenal of weapons of mass destruction. Tony Blair has made it clear that he believes a pre-emptive strike against Baghdad may be necessary in order to halt Saddam's weapons program.15

However, since President Bush's Rose Garden speech on June 24, there has been mounting speculation that the Anglo-U.S. "special relationship" has started to erode. Some analysts predict that the extremely close post-September 11 partnership between the United States and Britain will be torn apart over the Palestinian issue. A split in the alliance would have serious consequences for the expansion of the war on terrorism, particularly planned military action against Iraq.

Talk, however, of a Bush-Blair rift over the Palestinian question is exaggerated. While there undoubtedly are policy differences between the two leaders that have been magnified in public perception by the anti-U.S. and anti-Israeli statements made by some Labour politicians, there is a great deal of common ground on the Middle East question. And while Tony Blair has made it clear that Britain is prepared to continue negotiating with Yasser Arafat and will recognize his leadership if he wins the forthcoming elections, he has also made known to the Palestinians that he believes an eventual change of leadership is the best solution for the long-term future of Palestine.

British Foreign Office Minister Mike O'Brien was dispatched to Ramallah for talks with Arafat just days after President Bush's Middle East speech, with the clear message that Palestinian reform is needed before progress can be made. O'Brien stated after the talks that Britain is pushing to create "circumstances in which other representatives can come forward with whom we can deal, as well as President Arafat."16 A spokesman for the Prime Minister emphasized that while the British government thought it was necessary to keep lines of communication open with the Palestinian leader, "it's no secret that...we believe that Yasser Arafat is somebody who has let down the Palestinian people."17

The British Prime Minister's own view was expressed clearly in his response to questioning in the House of Commons by Charles Kennedy, leader of the opposition Liberal Democrats, on his return from the G-8 summit in Canada. Kennedy had criticized U.S. "unilateralism" and "isolationism," over the International Criminal Court issue and had urged Blair to "point out to the American Administration the fundamental error of their ways." He condemned the U.S. position on the Middle East, observing that "it never looks good for international countries, democratically based, to be seen trying to dictate what other countries should be doing."18

Blair's answer illustrates the clear difference between the position of the British government and the positions of Britain's European allies:

As for the United States and the Palestinian Authority, it is important to be clear about what the United States is and is not saying. The United States is not saying that the Palestinians cannot choose who they want. They can choose who they want. The United States is merely saying that if the Palestinians choose someone who is not a serious partner for peace, that will make it far more difficult to conduct negotiations, and frankly I agree with that.19

Blair's more conciliatory stance is shared by a minority of his European colleagues, including Danish Prime Minister Anders Rasmussen. Rasmussen, while supporting the official EU position of recognizing Arafat's leadership, is extremely critical of Arafat's failings. He has stated that he shares "President Bush's disappointment that Arafat has obviously not done what he could and what he should to prevent terrorism and suicide bombers."20 Like Blair, Rasmussen also has signaled his opposition to sanctions against Israel, making it clear that he believes "trade sanctions or other forms of economic reprisals, such as boycott of Israeli products, would not contribute to advancing peace in the region."21

The British approach to the Middle East crisis over the past few months has been far more measured than that of the European Commission and most other European governments. While there has undoubtedly been fierce criticism of Israeli Prime Minister Ariel Sharon in the Commons, it is important to draw a clear distinction between the views of outspoken Labour backbenchers (and some junior government ministers) and that of Downing Street. British government condemnation of Israel is far less vocal than that of Britain's European partners.

Significantly, Britain voted against a U.N. resolution that condemned Israel for "acts of mass killings" of Palestinians. That resolution was backed by such EU countries as France, Belgium, Spain, Portugal, and Sweden. The British government rejected the resolution as unacceptable because it was "unbalanced and did not give a firm statement on terrorism."22

European Opposition

For the European Union, the Israeli-Palestinian conflict--not the threat to international security posed by Baghdad--is the most important foreign policy issue in the region. The general view of leaders throughout continental Europe is that the EU should continue to work with Yasser Arafat and the Palestinian Authority in the run-up to elections in January. In the view of European Commission President Romano Prodi, Arafat is "the only valid interlocutor for Israel."23 Speaking in Copenhagen soon after President Bush's speech on June 24, Prodi emphasized that "It's up to the Palestinian people to choose their leader and not us. We have to accept the result of a free election whether we like it or not."24

German Foreign Minister Joschka Fischer responded to President Bush's call by remarking that "the Palestinian people alone must decide on its legitimate leadership,"25 a sentiment echoed by French President Jacques Chirac at the recent G-8 summit: "[I]t is for the Palestinian people, and them alone, to choose their representatives."26Immediately after President Bush's speech, Chirac dispatched new French Foreign Minister Dominique de Villepin to Ramallah to meet with Arafat in a display of solidarity with the Palestinians.27

For the United States, the issue is not whether to support a new democratically elected president of Palestine come January, but whether there can be any lasting peace without leadership that forcefully rejects terrorism. Moreover, the United States believes the threat posed by Iraq cannot be ignored and allowed to grow while peace is sought in the Arab-Israeli conflict.

The EU disagrees; it believes there can be no talk of an Iraq war until peace has been brought to the Middle East. In an interview with The New York Times, a French government official criticized President Bush's advisers as "obsessed with Iraq, while we are obsessed about achieving peace. The important thing is to build a coalition for peace in the Middle East, not to build a coalition for war in Iraq."28

Javier Solana, the EU's "high representative" for common foreign and security policy, has emphasized that it would be "very, very difficult" for the Europeans to back military action to remove Saddam Hussein without substantial progress toward creating a Palestinian state first. Solana believes it would also be extremely hard to hold Palestinian elections at the same time as a war in the Gulf.29

Russian President Vladimir Putin has supported the EU's position on Palestine, saying it would be "dangerous and mistaken" to remove Arafat from power, which could bring about the "radicalization of the Palestinian people."30 The Russians have pledged to maintain dialogue with Arafat, described by Foreign Minister Igor Ivanov as the "legitimate leader of the Palestinian people." With France, Russia is calling for an international conference "for working out a global political solution to the Middle East problem."31

The European and Russian stance is also backed by U.N. Secretary General Kofi Annan, who made it clear that "the UN still recognizes Chairman Arafat and will continue to deal with him until the Palestinians decide otherwise."32

While refusing to rebuke Arafat for failing to halt the suicide bombings, the European Union and individual EU governments also have been unequivocal in condemning Israeli incursions into the West Bank and Gaza Strip. European politicians often depict Israeli Prime Minister Ariel Sharon and his administration as an evil occupying colonial power while portraying Arafat and his Palestinian authorities as freedom fighters. Evoking language once used to describe the Nazi era, Norbert Bluem, a former German labor minister under Helmut Kohl, accused Sharon and his cabinet of pursuing a "Vernichtungskrieg," or "war of annihilation."33

Many Europeans see Sharon and President Bush, not Yasser Arafat, as impediments to resolving the crisis. Politicians lampoon Sharon as a swaggering bully, a puppet of the United States (or vice versa), and even a terrorist. For example, veteran Irish Member of the European Parliament (MEP) John Cushnahan, in a speech to the Parliament in February, condemned Sharon's "terrorist behavior" in Lebanon, noting, "It is regrettable that he was subsequently elected as Prime Minister of Israel, this being the root of the current problems." He went on to say that

Current Israeli policy is ludicrous and counterproductive. How can they make demands on Arafat to behave as if he was the leader of a normal state, while at one and the same time they make him a virtual prisoner in his own home, destroy his airport and his broadcasting station and humiliate him? Who do they want to replace him with? In the post-11 September situation, the European Union has been oversensitive in its approach to the Middle East. We are indeed an honest broker and we should be vigorous in that approach. The fact that Americans are indebted to us for the solidarity and the support that we provided when they needed it should mean that we are entitled to a reciprocal response from them. And instead of being the puppet of Israel, they should join with us in an even-handed policy approach to the tragedy of the Middle East. If that is not forthcoming, then we should act on our own. It is frustrating that the United States through its present stance is becoming much more part of the problem than the solution.34

The blatant anti-Israel bias on display in European Parliament debates in Strasbourg is both crude and distasteful, and counters European claims to be even-handed neutral observers in the Middle East. The debates, in the words of British MEP Daniel Hannan, have "an almost pantomime quality" to them, with cheers for pro-Palestinian remarks and boos for the few speeches defending Israel. Describing a debate that took place in early April, Hannan noted:

The handful of speakers who concentrated on Palestinian terrorism were listened to in stony silence, while attacks on Israel were received in an ecstasy of desk-banging and ululation (primly described in the official record as "loud applause").35

The debate was dominated at times by hysterical speeches decrying Israeli "state terrorism" and "war crimes," combined with calls for economic sanctions, arms embargoes, and the recalling of EU ambassadors. The general sentiment of the majority of speakers was summed up by Danish MEP Ulla Sandbaek, who asked, "When does the EU plan to call a spade a spade and designate as terrorism what Sharon and his soldiers are doing, namely killing thousands of civilians and innocent people?"36

In a display of scorn for Sharon's administration, European MPs voted by 269-208 to adopt a resolution calling for the Commission to suspend trade and political ties with Israel (the EU-Israel Euro-Mediterranean Association Agreement), and urged the EU to prepare to participate in a potential U.N. peacekeeping mission to the Middle East.37

EU foreign ministers, led by Britain, Germany, and the Netherlands, voted by narrow margins against Spanish and Belgian-led calls for the imposition of economic sanctions against Israel.38 Commission President Prodi has stated that the sanctions issue may be reconsidered at the next meeting of the EU-Israel Association Council, scheduled for December.39

In recent months, the British Parliament also has witnessed fierce criticism of the Israeli position, largely by Labour backbenchers. One of the strongest attacks on the Israeli government came from former Labour Shadow Foreign Secretary Gerald Kaufman, who branded Sharon first as a "right-wing thug" and later as a "war criminal."40 In an impassioned speech to the House of Commons, Kaufman stated, "we need to ask ourselves why young Palestinians, men and women with their lives before them, decide to turn themselves into human bombs":

It is time to remind Sharon that the Star of David belongs to all Jews, not to his repulsive Government. His actions are staining the Star of David with blood. The Jewish people, whose gifts to civilized discourse include Einstein and Epstein, Mendelssohn and Mahler, Sergei Eisenstein and Billy Wilder, are now symbolized throughout the world by the blustering bully Ariel Sharon, a war criminal implicated in the murder of Palestinians at the Sabra and Shatila camps and now involved in killing Palestinians once again. Sharon is not simply a war criminal; he is a fool.... Now the state of Israel is a ghetto: an international pariah.... Our Prime Minister is an internationally respected statesman. He must use his influence with the United States--the special relationship--so that Bush speedily compels Sharon to return Israel to the international community.41

Reasons for Europe's Anti-Israel Position

There are several key reasons why Europe is leading international criticism of Israel:

• A growing fear of Islamic extremism within the EU's borders.
  In particular, European politicians with large Muslim electorates are keen not to alienate or offend them. There are over 10 million Muslims living in Western Europe (including 4.5 million in France), making up nearly 4 percent of the EU's total population.42 (See Table 1.) Europe also continues to provide safe haven for Palestinian charity groups that have close ties to terrorist movements, such as Hamas. Such charities operate with impunity in major European cities.43 Brussels was recently described by a Belgian parliamentary commission as a major recruiting base for al-Qaeda and as a launch pad for terrorist attacks by Islamic extremists.44

  Anti-Semitic violence is thriving and even tolerated in parts of the European continent, particularly in France and Belgium. In France, home to Europe's largest Jewish population of 700,000, there were 300 anti-Semitic attacks in the first quarter of 2002 alone, including the burning down of synagogues in Marseilles, Strasbourg, and Bordeaux.45

• Resentment against the United States.
  Much of the anti-Israeli rhetoric in Europe is vented by politicians and bureaucrats with deep-seated resentments against the United States and the projection of U.S. power internationally. Israel is seen by many left-wing Europeans as a satellite of the United States and the standard bearer of what they perceive to be "U.S. imperialism."
   
• Opposition to a campaign against Iraq.
  Some European leaders see the debate over the current crisis in the Middle East as an opportunity to call for a halt to proposed U.S. and British military action against Baghdad. The close relationship between Britain and the United States is resented by politicians in many European capitals, particularly Paris, Brussels, and Berlin, who believe Anglo-U.S. action to remove Saddam Hussein is not justified, particularly during a time of turmoil in the West Bank. They argue that the Arab-Israeli conflict and the threat posed by Saddam's regime are intricately linked and must be handled through international mediation and the continued engagement and appeasement of Saddam Hussein.
   
• An opportunity to gain influence.
  After months of being sidelined in the war against terrorism after the September 11 attacks, the European Union is keen to be seen flexing its muscles in a region where it believes it has political and economic influence. The EU continues to cling to delusions of grandeur regarding its military and peacekeeping capabilities. Europe would be willing to lead a high-profile U.N.-authorized peacekeeping operation in the West Bank, despite the disastrous and humiliating record of European peacekeepers under U.N. (as opposed to NATO) command in places such as Srebrenica. The operational feasibility of such a force would depend heavily on whether the British would participate, which could greatly complicate any U.S.-U.K. military action against Iraq.

European Sympathy for the Suicide Bombers

The EU's External Relations Commissioner, Christopher Patten, who has led the EU attacks on proposed U.S. military action against Iraq, is at the forefront of European criticism of Israeli policies. In an interview with the BBC, Patten accused Sharon of provoking an "insane cycle" in the Middle East resulting in a "cult of death." While condemning Palestinian suicide bombers, Patten observed that "you do have to recognize what is the political context in which young men and women strap bombs to themselves and go out to murder other young men and women."46

Patten's belief, shared by many of his colleagues in Brussels, is that Israel has effectively hijacked the war against terrorism and is deliberately destroying the Palestinian Authority for purposes that have "nothing to do with trying to deal with suicide bombers." The aim of the Israelis, according to Patten, was to "destroy what exists so far of a quasi-viable Palestinian state."47

Patten is by no means alone in Europe in placing the blame for the Palestinian bombers on Israel. Such sentiments are widely shared among liberal political elites in leading European cities, who claim that the supposedly aggressive policies of the Israelis have provoked violent responses among an "oppressed" occupied people.

Cherie Blair, wife of the British Prime Minister, was forced to apologize after she declared at a Medical Aid for Palestinians charity event in London that "as long as young people feel they have got no hope but to blow themselves up you are never going to progress."48 Her insensitive remarks, made only hours after a suicide bomber killed 19 Israelis on a bus in Jerusalem, caused outrage in the British media. British Foreign Secretary Jack Straw intervened in Mrs. Blair's defense, telling The Times that "when young people go to their deaths, we can all feel a degree of compassion for these youngsters. They must be so depressed and misguided to do this."49

European sympathy for the motivation of the Palestinian suicide bombers illustrates the danger of drawing moral equivalence between the actions of suicide bombers and the defensive military operations of Israeli forces. A case in point is a statement by labour MP Brian Iddon, secretary of the House of Commons all-party Palestinian group. Referring to the government's decision to grant export licenses for British components to be used in American F-16 fighters destined for Israel, Iddon told the Commons:

I am very disappointed that we are aiding and abetting the Americans to attack the Palestinians. I have been disappointed by the British government's attitude towards Palestine. They keep mentioning in statements suicide bombers, terrorism, as if the Palestinians were the only ones creating terrorism in that area. I would submit that Ariel Sharon and particularly his defense force are equally terrorizing the Palestinians.50

For the United States, the heart of the matter is the defense of a democratic nation-state in the face of a sustained campaign of terrorism while at the same time ensuring the long-term future of the Palestinian people. In contrast, for many in Europe the issue is one of economic, racial, and political oppression by a colonial power. Simplistic parallels are drawn by European politicians and intellectuals with the former apartheid government in South Africa and its treatment of the black majority.

British writer Ian Buruma summarized this view in a critique of left-wing thinking on Israel in an article in The Guardian. For those on the left, Palestine is the latest cause célèbre, following in the footsteps of Vietnam, Chile, and South Africa:

In the case of Israel, as with South Africa, moral outrage comes more easily. A developing world people is being oppressed by the rightwing government of a modern capitalist country, backed by the US. Territory is being occupied by armed forces, which brings back memories of colonialism.51

The EU, adopting a socialist worldview, argues that the issue of global poverty is central to the whole debate on the war on terrorism. Chris Patten made this point during an interview with The Guardian in which he talked about the "dark side of globalization" and emphasized the superiority of the EU's "smart development assistance" over America's use of "smart bombs." Economic solutions, not military ones, Patten argued, are required in the long run to defeat the threat of terrorism: "We have realized that we have to tackle the root causes of terrorism and violence."52 This view is shared by Robin Cook, the Leader of the House of Commons and former British Foreign Secretary, who told MPs that "world poverty provides the breeding ground for terrorism and the recruiting ground for the fundamentalists."53

Hubert Védrine, the former French foreign minister, made the same point in an interview with French radio, when he criticized U.S. foreign policy for its "new simplism which consists in reducing everything to the war on terrorism." He emphatically declared, "We cannot accept that idea. You have got to tackle the root causes, the situations, poverty, injustice." American "unilateralism," claimed Védrine, presents a problem for France and for Europe "because it is not our vision of the world, it is not our vision of international relations."54

The evidence, however, suggests a different situation. Most suicide bombers are not poverty-stricken, depressed, and desperate. Their living standards are similar to those of the terrorists who carried out the attacks of September 11: They are well-educated and highly motivated people with good jobs who come from wealthy homes.55 They are driven by political, racial, and religious hatred of Israel, fostered by the infrastructure of the Palestinian Authority.56 The European policy of giving more money to the PA is both self-defeating and morally wrong if in any way it contributes to the wave of suicide attacks that are killing Israelis and Palestinians alike.

Most telling is the fact that the European expressions of sympathy for the suicide bombers contrast strikingly with the conclusions of a detailed investigative report by Amnesty International--for many years a fierce critic of Israeli occupation of the West Bank. The July 2002 Amnesty report focused on the 130 attacks by Palestinian armed groups on Israeli civilians that have claimed 350 lives since the start of the al-Aqsa intifada on September 29, 2000. The Amnesty report concludes that Palestinian attacks on Israeli civilians "constitute crimes against humanity under international law" and emphasizes that

Amnesty International condemns unreservedly direct attacks on civilians as well as indiscriminate attacks, whatever the cause for which the perpetrators are fighting, whatever justification they give for their actions.... Targeting civilians and being reckless as to their fate are contrary to fundamental principles of humanity which should apply in all circumstances at all times.57

European Funding for the Palestinian Authority

President Bush's call for the removal of Yasser Arafat helped to focus attention on the EU's substantial funding program for the Palestinian Authority and the possible links between European aid and Palestinian terrorist organizations. The EU is the world's biggest donor of aid to the Palestinian Authority, and European Members of Parliament have expressed outrage at the destruction of EU-funded projects by Israeli forces. The World Bank claims that the cost of Israeli-inflicted damage to Palestinian infrastructure during recent military operations amounts to US$600 million to US$800 million.58

According to official European Commission figures, the EU gives the Palestinian Authority 10 million euros a month (US$9.6 million) in direct budgetary assistance and has handed over 1.4 billion euros (US$1.34 billion) to the PA since 1993.59 Some European newspapers estimate the total figure to be far higher. The Financial Times has put the figure for EU aid to the PA between 1994 and 2000 at US$3.36 billion, during which time the Europeans turned a blind eye to corruption, illegal weapons factories, and security force human rights violations.60

In addition to its monthly handout to the Palestinians, the European Commission recently decided to award 260,000 euros (US$250,000) to Palestinian prisoners held in Israeli detention centers. This legal aid is part of the "European initiative for democracy and human rights," designed to assist Palestinians "in the event of ill-treatment and torture during interrogations carried out by the army and the Israeli secret service."61

The European Commission has agreed in principle to continue funding the Palestinian Authority through February 2003. The primary objectives of EU budgetary support are

to mitigate the effects of the freeze of revenue transfers by the Government of Israel, thus contributing to the functioning of the PA administration and to the restoration of the conditions necessary for peace once the present crisis is over; [and] to contribute to sounder and more transparent budget management of the PA over the medium to longer term.62

In contrast, the United States gives no funds directly to the Palestinian Authority, but remains one of the largest donors of humanitarian aid to the Palestinian people. The United States, in fact, channels $142 million a year to the Palestinians through the United Nations, the Red Cross, and non-governmental organizations.63

A high degree of international concern exists over the PA's use of EU funds. The Israelis have provided detailed evidence in a parliamentary report that some EU aid has been used to promote Palestinian terrorism. The Israeli government alleges that Yasser Arafat was "personally involved in the planning and execution of terror attacks" by giving financial support to gunmen from the Fatah al-Aqsa Martyrs Brigade. According to the report, "Arafat and his men used the funds donated to them by other countries, including the European Union, to finance terrorist activity."64 The allegations, based on captured Palestinian Authority documents, have been widely quoted in European newspapers, including The Times in London.65

A damning indictment of Brussels' links with Arafat was published recently in the widely respected German newspaper Die Zeit. The evidence put forward in the Die Zeit report clearly suggests a link between EU subsidies and Palestinian terrorism. The report's authors concluded that "the gullibility, the naiveté and the forbearance of the Europeans seems unending."66 Their findings were backed by The Wall Street Journal Europe, which noted in an editorial that "in its lavish aid policies toward the Palestinian Authority the EU has indirectly contributed to the Palestinian suicide bombings."67

These claims were dismissed by the European Commission after an internal investigation headed by Chris Patten. Unsurprisingly, the Commission concluded:

We have found no evidence of EU funds being used for purposes other than those agreed between the EU and the PA. The documents presented to us by Israel do not prove that EU funds have been misused.... So there is no case for stating that EU money has financed terrorism, has financed the purchase of weapons, or any similar activities.68

Significantly, the Commission's defense of the EU's handling of aid to the Palestinians rested heavily on its assertion that the disbursement of EU aid is subject to stringent monitoring by the International Monetary Fund (IMF). According to Patten,

the European Commission has imposed stringent conditionality on the use of funds and monitors the implementation of agreements with the PA extremely closely. All budgetary assistance is strictly vetted. The payments (10 million euros a month) are only transferred after the IMF has verified that the money has been properly spent according to the agreed purpose.69

An EU-sponsored working group on the state of the EU budget even went so far as to boast that EU payments to the Palestinians were subject to "the most extensive and intrusive monitoring system in any post-conflict situation."70

Embarrassingly for the Commission, however, the IMF denies that it has responsibility for monitoring EU funds, making a mockery of EU claims that its Palestinian aid is independently scrutinized. In a statement issued to The Wall Street Journal, the IMF's Director of External Relations stated that

The IMF does not "monitor foreign assistance" to the Palestinian Authority. It simply provides the EU with information about broad developments related to its budget. It does not monitor or control every item in the budget.71

The IMF's statement suggests that the EU is actively misleading the international community with regard to the nature of the monitoring of its funds for the PA. Under present conditions, it seems impossible for the EU to be certain that European taxpayers' money is not being used to support Palestinian terrorism. Further, it is highly unlikely that an internal investigation by the European Commission, a body that only recently emerged from one of Europe's biggest corruption scandals, can be objective and thus hold real credibility.72

Indeed, the entire EU budget management system has recently been described as "out of control" and "shambolic" by the European Union's former chief accountant, Marta Andreasen, raising serious doubts as to whether the European Commission is able to monitor international aid projects adequately, let alone monitor the European Community's massive 98 billion euro (US$94 billion) annual expenditure.73

The Commission's response to international concern, as well as internal European doubts, has been arrogant and dismissive and should be challenged forcefully by the United States. The Bush Administration should press for the establishment of an independent international commission of inquiry to establish whether European funds are being used by Palestinian terrorist organizations or have been used by them in the past.

At the same time, the Administration should call on the EU to halt its direct funding of the Palestinian Authority until elections have been held and a new leadership emerges. The European Union should be encouraged to divert its aid program away from the infrastructure of the PA and into properly audited humanitarian assistance programs run by non-governmental organizations and linked to bank accounts that cannot be accessed by Arafat or his cabinet officials.