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European Neighbourhood Policy and Enlargement Negotiations (DG NEAR)

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EU and Palestine

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.

More on EU support to Palestine: Factsheet: EU support to Palestinians 

Bilateral Cooperation

The Neighbourhood and Development Cooperation Instrument is the main EU financing instrument for Palestine in 2021-2027.

The European Joint Strategy 2021-24 for Palestine, setting out targeted and shared priorities of the EU and the EU Member States, was adopted on 22 November 2022. It is aligned with the Palestine National Policy Agenda 2017-2022, adopted by the Palestinian Authority in December 2016. In continuity with the previous Strategy for 2017-2020, focus is put 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 EU’s multi-annual financial allocation for Palestine under the European Joint Strategy 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 December 2023, the European Commission adopted a €118.4 assistance package to support the Palestinian Authority (PA).

Through the EU’s PEGASE mechanism, the new financial assistance will contribute to the payments of the salaries and pensions of civil servants (€50 million), to the social allowances for vulnerable families through the Cash Transfer Programme (€35 million), to the payment for the medical referrals to the East Jerusalem Hospitals (€18 million), and to the administrative and technical capacity of the PA institutions.

This short-term package, together with the mid-term package foreseen for next year, will contribute to lay the ground for economic and political stability of Gaza and the West Bank, including East Jerusalem and Area C, based on the two-state solution.

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.

For 2021 to 2023, the EU’s contribution to UNRWA’s programme budget under NDICI amounted to €281 million. Additional contributions are provided through 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.

The European Commission disbursed its annual contribution of €82 million to UNRWA in early 2023, in line with the provisions of the EU-UNRWA Joint Declaration. An additional contribution of €10 million to the Agency was processed in November 2023 to address the current situation on the ground.

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.


Click on the banner below to find out about our activities in Palestine through our EU-funded regional communication Programme EU NEIGHBOURS South, designed to create awareness about the European Union in the Southern Neighbourhood region which includes 10 countries and territories: Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine, Syria and Tunisia.



Regional cooperation

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.

Other financing instruments

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.

*  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

Further information

Factsheets available to download

Key documents

For specific information on programming documents and financing decisions (see below):