THE decision yesterday by European Union foreign ministers to provide 120 million euros of aid to the Palestinian Authority was timely and wise. It averted a premature breakdown in relations with the new Hamas government that is now in the process of being formed, and it answered the urgent need for assistance for basic humanitarian needs, as well as for salaries and utility service costs. By channelling some of the funds through the United Nations and paying other costs directly, the EU has avoided the need to decide whether it will continue longterm assistance to the Palestinian Authority when Hamas takes over as the official government. This issue will have to be faced quite soon but in the meantime it was essential avoid a breakdown in government services because of lack of cash flow, a problem made worse by Israel's refusal to pay some 40 million euros in tax revenues. Yesterday's decision was in line with an earlier statement by the Quartet of the EU, Russia, UN and US, that measures should be taken to “facilitate the work of the caretaker government”. It is not clear whether the United States is party to the EU interim financing arrangement; Washington has taken a harder line on interim assistance than the EU. Prior to the recent election which brought Hamas to power, the EU was the biggest financial donor to the Palestinian Authority with some 550 million euros annually while the US paid approximately 300 million euros. On the political front, the Palestinian president, Mahmoud Abbas, said over the weekend that he would consider resigning from office if he felt that a Hamas government was impeding his peacemaking agenda. He urged the Hamas leadership to renounce violence and recognise Israel's right to exist before being sworn-in as a government. It is unlikely that Mr Abbas will get his wish, if only because his own softly-softly approach to peace negotiations over the past year has yielded very little and there is now almost nothing of substance on which the two sides are likely to be able to reach agreement.