VZCZCXRO8920
RR RUEHAG RUEHBC RUEHDE RUEHDF RUEHIK RUEHKUK RUEHLZ RUEHROV
DE RUEHBS #0902/01 0781136
ZNR UUUUU ZZH
R 191136Z MAR 07
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHTV/AMEMBASSY TEL AVIV
RUEHKO/AMEMBASSY TOKYO
RUEHNY/AMEMBASSY OSLO
RUCNDT/USMISSION USUN NEW YORK
RHEHNSC/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 03 BRUSSELS 000902 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
FOR NEA/DAS DANIN, NEA/IPA WILLIAMS/SHAMPAINE; PASS USAID 
FOR ANE MCCLOUD/BORODIN; NSC FOR ABRAMS/DORAN/WATERS; 
TREASURY FOR SZUBIN/LOEFFLER/NUGENT/HIRSON 
 
E.O. 12958: N/A 
TAGS: EAID PREL KPAL IS EUN
SUBJECT: MAJOR DONORS DISCUSS COORDINATION STRATEGY FOR 
ASSISTANCE TO PALESTINIANS 
 
 
1.(SBU)SUMMARY. In a Brussels meeting March 13, the European 
Commission solicited comments from the international donor 
community on its concept paper proposing an International 
Mechanism for Support to Palestinians (IMSP).  The EC paper 
was drafted in response to the Quartet,s call for proposals 
to further develop the existing Temporary International 
Mechanism (TIM) in the areas of governance, institution 
building, and economic development as a means to meet 
Palestinian needs and support the political process. 
However, despite EC insistence that its proposed IMSP 
coordination mechanism had no bearing on the likely near-term 
emergence of a new Palestinian Authority government, EC 
officials admitted that their presentation of the proposal to 
EU Member States earlier in the day had uncovered 
considerable skepticism in this regard.  Some EU States had 
argued that the paper, by differentiating between Palestinian 
entities with which support could be expanded now 
(Presidency, independent agencies) and others (PA Ministries) 
with which engagement would need to await improved political 
circumstances (at least implicitly, acceptance of the Quartet 
principles) sought to unduly pre-empt subsequent EU political 
decisions on engaging a new PA government.  As a result, the 
EC said it would wait for the EU to reach a decision 
regarding whether a new PA government reflected the Quartet 
principles before recirculating the IMSP paper ) only in the 
event the EU determined the new PA did not reflect the 
principles would the paper go forward.  EC officals added 
that in the absence of EU consensus on the inclusion of 
security in the IMSP, that section of the proposal should be 
considered moot for the time being.END SUMMARY. 
 
Proposed Structure of the IMSP 
======================= 
2.(SBU) The draft concept paper describes a mechanism that 
establishes an "International Consultative Group" (ICG) 
underneath the Quartet serving to coordinate aid through 
three main channels: I. Social and Emergency Assistance 
(possibly led by the UN); II. Governance and Institution 
Building (possibly led by the EC); III. Economic Development 
(possibly led by the World Bank).  Within the ICG would be a 
chairmanship led by a rotation of leading donors.  Membership 
would include other involved donors, Quartet envoys, and the 
Office of the PA President.  Operations would be coordinated 
by a Secretariat. 
 
Objectives and Principles 
================== 
3.(SBU) As the chair of the meeting, DG RELEX Middle East, 
Southern Mediterranean Director Hugues Mingarelli dominated 
the floor on behalf of the EU.  Flanked by Andreas Reinicke, 
foreign ministry representative of the German EU Presidency, 
and Richard Weber, Director of DG EuropeAid, Mingarelli also 
briefed on behalf of the Member States, who discussed the 
paper with the EC earlier that day.  Mingarelli outlined four 
main objectives and principles to be accomplished by the 
meeting: 
 
a. Create consensus on moving from humanitarian assistance to 
development and institution building; 
 
b. Learn from existing coordination mechanisms, notably the 
Ad-Hoc Liaison Committee (AHLC) led by Norway; 
 
c. Establish a supportive link in furtherance of the 
political process being pursued by the Quartet; and 
 
d. Ensure broad participation of all stakeholders in the 
coordination mechanisms, i.e. strong international support 
and Palestinian ownership. 
 
He stressed that the EC does not intend to set up a new 
agency or fund, emphasizing that the mechanism should remain 
temporary.  Furthermore, he stated that an ideal situation 
would involve engagement under the terms of the IMSP as 
quickly as possible, irrespective of subsequent political 
developments regarding emergence of a new PA government, in 
order to avoid the perception of EU aid as a political 
response.  However, Mingarelli noted a lack of consensus 
among the Member States, who shared many of the same issues 
 
BRUSSELS 00000902  002 OF 003 
 
 
participants in the meeting later discussed. 
 
¶4. (SBU) Against this backdrop, donors and IOs presented 
their views, which ranged from the highly critical (Norway) 
to the mildly supportive (U.S.).  EU PLO Representative Leila 
Shahid expressed support for more aid to Palestinians, but 
argued that seeking to make political distinctions between 
"politically acceptable" and "politically unacceptable" 
Palestinian governmental entities had served only to harm the 
well-being of the Palestinian people and to damage President 
Abbas and other advocates of a negotiated peace.  In any 
case, Israel,s responsibilities should be included in the 
paper, and GOI participation in discussion and implementation 
of the mechanism sought, given Israel,s "responsibility" to 
provide Palestinian tax and customs revenue and to facilitate 
movement and access.  Norway complained that the proposed 
IMSP was unnecessary and harmful in that it would duplicate 
the existing Ad Hoc Liaison Committee (AHLC) structure, which 
included Israel.  Norwegian MFA DDG Kare Eltervag said Norway 
intended to resurrect the AHLC and would begin consultations 
with members and other interested parties immediately after a 
new Palestinian government is established to discuss 
convening an AHLC meeting before the expiration of the German 
EU Presidency in June.  (Comment:  EU officials separately 
told NEA/IPA Director Williams that German advocacy of an 
AHLC in that morning,s EU member states, discussion of the 
IMSP, and apparent "collusion" between Norway and Germany in 
this regard, had caused considerable unhappiness within the 
EU and EC.  End Comment.) 
 
¶5. (SBU) Williams said the US appreciated the EC,s effort to 
be responsive to the request of the Quartet for a proposal to 
further develop the TIM and to broaden it beyond humanitarian 
assistance into the areas of governance, economic 
development, and institutional capacity 
preservation/building.  The broad approach outlined in the 
IMSP paper made sense -- clearly delineating those 
Palestinian entities with which such efforts could and should 
be undertaken now  (such as the PA Presidency and independent 
agencies) while emphasizing that broader engagement must 
await political developments.  Here the paper should be 
revised to make crystal clear that the necessary political 
development was the emergence of a PA government clearly and 
credibly committed to the Quartet principles.  Williams 
encouraged the EC to be clearer with regard to the specifics 
of its proposals, particularly in the governance area, and 
throughout to condition any engagement with PA government 
entities upon acceptance of the Quartet principles.  He added 
that more focus on the economic development area would be 
useful, to include consideration of working with non-FTO 
municipalities on infrastructure, and that a reference to the 
lead role of the USSC in coordinating donor assistance 
related to the AMA/Karni project would be appropriate. 
Finally, he observed that coordination and consultation with 
President Abbas and his designated representatives should be 
undertaken before moving forward with the Palesing upon which the EC shoQ 
greater effort. 
 
¶6. (Qoy Yakovlev expressed tt no EC action o 
scheduling issues.  Mingarelli responde that given the lack 
of consensus on the pape within the EU, securing approval 
prior to a ossible Quartet meeting in April was "highly 
Qnlikely." 
 
¶7. (SBU) Arab League SYG CoS Hisham Yousef joined the UN, 
Egypt and World BanQ in arguing that an approach which sought 
to #ondition assistance mechanisms, particularly development 
assistance mechanisms, upon politicalcommitments represented 
"an approach without Q vision."  While the AL had channeled 
 
BRUSSELS 00000902  003 OF 003 
 
 
its aid over the past year solely via the office of President 
Abbas, the overall consequence ) despite considerable 
increases in donor assistance ) had been a real 
deterioration in the quality of life of the Palestinian 
people.  The best remedy, he noted (in words variously echoed 
by the aforementioned delegations), would be to re-establish 
across the board engagement with a new PA government (which 
he expressed confidence would "sufficiently" reflect the 
Quartet principles), and to re-instate the single Treasury 
account to ensure accountability and appropriate oversight of 
donor funds.  Israel should transfer Palestinian revenues to 
facilitate economic recovery. 
 
Conclusion 
======== 
¶8. (SBU) Mingarelli ended the meeting by expressing 
appreciation for donors, views.  He indicated that 
consultations with the PA Presidency would continue on how 
best to structure the mechanism, if a decision was taken to 
move forward with the concept.  In that event, donor input 
would be factored into a revised proposal which would be 
circulated for consideration.  Donor satisfaction would be 
crucial, he noted, not least because the EC has no additional 
funds to expend on an expanded mechanism (and indeed the 
EC,s TIM funding will expire by the summer.  He closed by 
warning participants about an "expectation gap," urging 
donors to prioritize and sequence their actions to reduce 
overlap and ensure maximum benefit for the Palestinian people. 
 
¶9. This cable was cleared by NEA/IPA Director Thomas E. 
Williams. 
 
GRAY. 
.