Today, the European Union has disbursed the first tranche of short-term emergency financial support to the Palestinian Authority. As announced on 19 July, EU assistance aims to address the most pressing financial needs of the Palestinian Authority and to support its reform agenda. The disbursement follows the signature of a Letter of Intent by the European Commission and the Palestinian Authority, setting out a strategy for addressing the critical budgetary situation of the Palestinian Authority. 

European Commission President Ursula von der Leyen said: “A strong and reformed Palestinian Authority is key to our common goal of a two-state solution. This is the only way to bring sustainable peace for both Israelis and Palestinians. The EU is fully committed to supporting the Palestinian Authority in these difficult times. Our €400 million emergency assistance supports a substantial reform agenda and paves the way for the recovery and reconstruction of Gaza.” 

As part of the €400 million EU short-term emergency financial support, the first instalment of €150 million has been released today. This includes €58 million in grants through the PEGASE mechanism to pay salaries and pensions of the civil servants in the West Bank and support vulnerable families. The European Investment Bank is providing €92 million through a line of credit to the Palestinian Monetary Authority. 

Subsequent payments of this short-term emergency financial support should follow in August and September, subject to progress on the implementation of the Palestinian Authority’s reform agenda. 

In early September, the Commission will present a legislative proposal for a Comprehensive Programme for Palestinian Recovery and Resilience, which will be designed to help the Palestinian Authority reach budgetary equilibrium by 2026 and ensure long-term financial viability. Starting from year-end, all disbursements under this long-term initiative will depend on progress on the implementation of the agreed-upon reform milestones. 

The European Union is the biggest provider of external assistance to the Palestinians, amounting indicatively to almost €1.2 billion for 2021-2024 under the European Joint Strategy, of which over €890 million have already been adopted.