The European Court of Auditors (ECA) has today published a report questioning the sustainability of the EU PEGASE Direct Financial Support (DFS) to the Palestinian Authority (PA). The ECA recommended that the programme be strengthened in the future to achieve better results.
As Hans Gustaf Wessberg, the ECA Member responsible for the report, stated: “While the Commission and European External Action Service (EEAS) have succeeded in implementing the support to the Palestinian Authority in difficult circumstances, there are a number of aspects of the current approach that are increasingly in need of an overhaul. Although some important results have been achieved, there is a need for major revisions such as encouraging the PA to undertake more reforms, notably in relation to its civil service. Furthermore, a way needs to be found to bring Israel to take the necessary steps to help ensure that PEGASE DFS is effective”.
The European Union has provided more than € 5.6 billion in assistance to the Palestinian people since 1994 with a view to helping solve the Israeli-Palestinian conflict. Since 2008, its largest programme in the occupied Palestinian territory (oPt) has been PEGASE DFS, which provided approximately €1 billion in funding from 2008 to 2012.
PEGASE DFS weaknesses
However, the ECA found that several aspects of the programming of funding need strengthening, making more use of competitive tendering could result in more savings and that the complex management system needs simplification.
The report also underlined that there were severe delays in the payment of salaries and in addition, a considerable number of civil servants in Gaza, due to the political situation, were being paid without going to work.
Moreover, despite the large PEGASE DFS funding, Palestine was facing a severe budget deficit in 2012 which hindered Public Finance Management (PFM) reforms.
ECA recommendations
Following the publication of the report, the ECA recommended that the programming of future PEGASE DFS be strengthened; the Commission reduce the costs of the programme and cooperate with Israel to ensure PEGASE DFS is more effective; and that the matter of the funding of salaries and pensions be resolved.
The Commission and the EEAS have agreed to review the PEGASE mechanism and take the recommendations made by the Court into account.
