The shock win by Hamas in Palestinian polls has placed the EU in a quandary. Should it continue its annual generous cash injections into the Palestinian territories even if a "terror group" is in power?
The Hamas victory has the EU walking a political tightrope
As the world absorbed the ramifications of Hamas' surprise victory in this week's Palestinian polls and leaders unanimously called on the radical Islamic group to renounce violence, the European Union was left increasingly questioning its own role as the region's biggest financial backer.
Since 2003, the EU has annually pumped about half a billion euros ($610 million yearly) in the Palestinian territories, much of it towards fostering democracy and aiding social and environmental projects.
But Hamas's defeat of the long-dominant Fatah faction in Wednesday's parliamentary vote and its reaffirmation of its commitment to what it calls armed resistance to Israeli occupation has cast doubt on future cash flows.
Though the EU has blacklisted Hamas after it spearheaded a string of deadly attacks against Israel since it was formed in the late 1980s, EU officials do maintain contacts with Hamas' civilian branch, saying that the group plays an important role in setting up social structures in the Palestinian territories.
Solana has been a regular visitor to the Middle East
Last month however EU Foreign Policy Chief Javier Solana threatened to cut off funds should Hamas join the government.
On Thursday, the 35-member EU said in a statement that "it reiterates its position that there is no place in a political process for groups or individuals who advocate violence."
At the same time it said the EU was "ready to continue to support Palestinian economic development and democratic state building."
Germans question future financial aid
But, in a stance echoed throughout Europe, many are questioning the logic of continued channeling of funds to a region governed in future by a party that refuses to recognize Israel's right to exist.
In Germany, politicians from both parties in the governing grand coalition, the Social Democrats (SPD) and the conservative Christian Democrats (CDU), expressed misgivings.
European politicians want Hamas to renounce violence and recognize Israel
Either Hamas renounces violence and recognizes Israel's right to exist "or we'll think about letting the finances dry up," Gert Weisskirchen, foreign policy expert of the SPD told daily Berliner Zeitung.
"We can't give taxpayers' money to such a government," said Elmar Brok, a CDU member and head of the Foreign Council in the EU Parliament.
Other politicians have underlined that Hamas must fulfill the twin requirements of renouncing violence and recognizing Israel's existence before there can be further cooperation with the EU.
In addition, Hamas must formulate a concrete plan for disarming its various factions, others said, saying that future German future financial help to the region would hinge on the factor.
Hamas dependant on EU aid
In a hint that the EU might consider continuing aid provided Hamas stuck to a few basic guidelines, EU External Relations Commissioner Benita Ferrero-Waldner said this week that "the most important thing is that we plan to work with any government if that government is prepared to work for peace, by peaceful means."
"And if the government follows the two treaties that we have and the principles it contains," she added.
The two treaties with the EU, which a Hamas-led government would have to stick to, deal with human rights, democracy and especially the peace process and the so-called Road Map that the former government had committed itself to. It would also include direct negotiations with the Israeli government.
EU foreign ministers will meet in Brussels on Monday (Jan. 30) to discuss the issue.
An EU diplomat told Deutsche Welle that at the moment Brussels was counting on using its financial clout to get Hamas to see reason because after all even Hamas leaders are aware that without EU funds, practically nothing can be achieved.