The EU is scrambling to find a way to avoid slashing aid to the Palestinians after Hamas takes power if, as feared, the militant group refuses to renounce violence or recognize Israel.
EU foreign ministers battled to make the sums add up at weekend talks in Austria, where Palestinian President Mahmud Abbas was due to arrive today at the start of four days of meetings with EU leaders.
But a study presenting their options warns bluntly that EU aid may be "seriously affected" if Hamas maintains its hard line.
"We want to remain a reliable partner for the Palestinian people, but we will not go soft on our principles," said EU External Relations Commissioner Benita Ferrero-Waldner at the talks in Salzburg.
The EU is the biggest provider of aid to the Palestinians, giving an annual 500 million euros (US$594 million).
But the future of those funds was thrown into doubt when Hamas swept to power in January, threatening to derail the Middle East peace process.
The EU is demanding that Hamas renounce violence, recognize Israel and honor signed accords if it wants to continue to receive EU funds.
In the meantime the EU has released 120 million euros for the Palestinian caretaker authorities, but is adamant that it will not pay a euro to an authority controlled by Hamas, which is on an EU terror group blacklist.
But the EU is clearly starting to think about exactly how it could continue funding if its worst fears are realized.
And to help EU governments decide, the EU external affairs commissioner presented the ministers in Salzburg with a paper detailing the breakdown of different kinds of aid and where exactly the money goes.
"Whilst it is too early to make judgments on the future political situation ... the continuation of EU financial support to the [Palestinians] beyond traditional humanitarian assistance may be seriously affected," it concludes.
It is understood that funds paid directly to the Palestinian government -- as opposed to via non-governmental organizations or other linked bodies -- would be most likely for the chop if Hamas stands firm.
Depending on which payments are stopped, this could cut up to 50 percent from the EU commission's 250 million euros annual aid to the already cash-strapped Palestinian Authority, according to Ferrero-Waldner.
So far, indications are that the EU will continue to provide funds at least until the composition of the new Hamas-led government is known. That is not expected before March 28.
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