The Palestinian Authority is operating on a quarter of the funds it needs to finance its activities, Finance Minister Salam Fayyad said on Tuesday before embarking on a trip abroad to drum up aid.
"Minimally, I estimate expenditures of the Palestinian Authority at $160 million a month at present. What we have is no more than $40 million a month," Fayyad told Reuters. "Clearly this is not something that can be sustained."
The Quartet of Middle East mediators - the United States, Russia, the United Nations and the European Union - suspended direct aid to the Palestinian Authority after the Islamist militant group Hamas formed a government last year. EU officials warned against expecting too much from a meeting between Fayyad and Benita Ferrero-Waldner, the European Union's external relations commissioner, in Brussels on Wednesday.
They said the meeting was important to hear from Fayyad - who won international praise for reforming Palestinian finances under the late Yasser Arafat - what help he needs and when his ministry may be ready to receive it.
But asked when the 27-nation bloc would decide on resuming direct aid, one EU official said: "It's going to take a while. (Fayyad's visit) is one step, definitely not the final, we are still in the exploratory phase." Fayyad meets Norwegian leaders on Thursday and will travel to Washington to attend the International Monetary Fund's spring meetings.
Hamas established a unity government with the secular Fatah faction last month but did not meet Quartet demands to recognise Israel, renounce violence and accept past interim peace deals.
The EU, the largest aid donor to the Palestinians, has made resumption of direct aid conditional on a Palestinian administration reflecting those principles. Despite the embargo on direct aid to the administration, EU assistance to the Palestinians increased last year to 700 million euros from around 500 million.
Of this 200 million euros went through a temporary aid mechanism set up last year to channel funds to keep essential state services running while bypassing the government.
EU officials said the temporary mechanism would remain in place for a while longer. Last week Fayyad, who also served as finance minister from 2002 to 2005, wrote an opinion piece in international and Palestinian newspapers restating his acceptance of the Quartet's terms and peace moves with Israel. Senior Palestinian officials said Palestinian President Mahmoud Abbas will also visit Europe and Asia next week to discuss aid to the Palestinian Authority.