The European Union is the biggest provider of external assistance to the Palestinians. In line with the goal of a negotiated two-state solution, EU efforts aim at promoting greater Palestinian control, autonomy and capacity to exercise responsibility to prepare for future statehood. The EU is also supporting efforts to strengthen the Palestinian Authority’s transparency and accountability, with a view to reinforce its role and credibility.

The EU/Palestine partnership is based on the Interim Association Agreement on Trade and Cooperation, signed in 1997 between the European Community and the Palestine Liberation Organisation, on behalf of the Palestinian Authority. The EU-Palestine Action Plan under the European Neighbourhood Policy was approved in May 2013, setting the agenda for economic and political cooperation with the EU. The Action Plan was recently prolonged for additional three years, until 2025.

The Neighbourhood and Development Cooperation Instrument is the main EU financing instrument for Palestine in 2021-2027. The instrument’s innovative approach includes but also looks beyond grant funding. An increased accent on blending EU grants with loans from European and International Financing Institutions will allow partner countries to unlock substantial level of concessional funding for investments. The new system of guarantees provided for under the NDICI will give access to additional funds from the crowding-in of both public and private investors. 

The European Joint Strategy 2021-24 for Palestine was adopted on  22 November 2022. The Strategy sets out targeted and shared priorities of the EU and the EU Member States. It is aligned with the Palestine National Policy Agenda 2017-2022, adopted by the Palestinian Authority in December 2016. In continuity with the Strategy for 2017-2020, focus will be on five interrelated pillars (Democracy, Rule of Law and Human Rights; Governance Reform, Fiscal Consolidation and Policy; Sustainable Service Delivery; Climate Change, Access to Self-Sufficient Water and Energy Services; Sustainable Economic Development)

The multi-annual financial allocation for Palestine under the NDICI for 2021-2024 amounts to €1.177 billion.

The EU’s cooperation portfolio in Palestine is implemented in different ways

i) Direct Financial Support

The EU is helping the Palestinian Authority meet its recurrent expenditure by contributing to the payment of salaries and pensions of a number of civil servants in the West Bank. It also provides assistance to the most vulnerable Palestinian families and helps pay for health referrals to the East Jerusalem hospitals. This support is channelled through the PEGASE instrument (Mécanisme Palestino-européen de Gestion de l’Aide Socio-économique). It is accompanied by a policy dialogue aimed at encouraging reforms, which includes an incentive-based framework that links part of this support to reforms in key sectors.

In 2022, the total EU contribution to PEGASE amounts to € 145.35 million of which €55 million for salaries and pensions, €13 million to support the East Jerusalem Hospitals and €50 million to support the incomes of the most vulnerable households (including additional €10 million from the food and resilience facility). In view of the needs arising from the COVID-19 pandemic the EU accorded exceptionally an additional EUR 20 million to contribute to the purchase of COVID-19 vaccines authorised by the European Medicines Agency (EMA).

ii) Support to Palestine refugees

The EU is one of the largest providers of assistance to Palestine refugees. The EU’s funding is used to ensure that the United Nations Relief and Works Agency for Palestine Refugees in the Near East’s (UNRWA) is able to provide health, education and social services, including salaries for teachers, doctors and social workers active in refugee camps.

The total EU contribution to UNRWA in 2018,2019, 2020 and 2021 was €487.6 million including contributions to the programme budget, contributions from the EU Regional Trust Fund in response to the Syrian Crisis, EU humanitarian aid, the food security programme under the Development Cooperation Instrument and the Instrument contributing to Stability and Peace. In 2022, the EU’s contribution to UNRWA is € 97 million, including € 15 million from the food and resilience facility. The EU already disbursed € 82 in support of the Agency’s programme budget in 2023.

iii) Development programmes

EU-funded development programmes in Palestine focus on job creation and access to water and energy. It is also used to support cooperation between Israel and Palestine, notably on energy and water, working with the Office of the Quartet.

In 2019 the first twinning project started in Palestine in the field of customs and two others are currently being implemented in the sectors of energy and audit. In 2022, Palestine benefitted from 6 TAIEX (Technical Assistance and Information Exchange instrument) events in 2019.

In addition, €12 million are allocated each year to projects in East Jerusalem, which is a key priority to keep the negotiated two-state solution alive, and to resolve “the status of Jerusalem as the capital of both states” as reflected in the EU Council Conclusions of 22 July 2014.

Palestine is a beneficiary of the European Peacebuilding Initiative together with Israel and Jordan.. Its overall objective is to facilitate the peace process by supporting a solid foundation at civil society level for a fair and lasting settlement in the Middle East. The programme distributes €5 million per year to Civil Society Organisations promoting links across the political divide in Jordan, Israel and Palestine.

Other regional programmes include actions in the area of Political and Social Development, Trade and Economic Development.

Palestine is eligible for funding under the following EU thematic programmes, including:

• The Human rights and Democracy thematic programme
• The Civil Society thematic programme
• EU humanitarian assistance
• The Erasmus+ programme, which enhances mobility and co-operation with the EU in the field of higher education. Under this programme, over 2,475 Palestinian students, professors and university staff travelled to Europe and up to 1,240 European counterparts travelled to Palestine between 2015 and 2020. In 2022, under the first call for proposals of the new Erasmus +, 307 grants for Palestinian students and higher education staff to travel to the EU were allocated, while 134 grants were assigned to their European counterparts to travel to Palestine.

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_{*  This designation shall not be construed as recognition of a State of Palestine and is without prejudice to the individual positions of the Member States on this issue.
** Mécanisme Palestino-européen de Gestion de l’Aide Socio-économique}

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