EU emergency support for Palestinian Authority kicks off, first €150 million disbursed

Brussels – €150 million today, another 250 million between August and September: In line with what was announced on July 19 in the letter of intent between Brussels and Ramallah, the European Union disbursed the first tranche of short-term emergency financial support to the Palestinian National Authority (PNA), vital assistance to address the PNA’s most urgent financial needs and crucial to supporting the reform program agreed with Brussels.

The priority is to address the Israeli-imposed block of PNA tax revenues, which is crippling the public machine in the West Bank and occupied Palestinian territories. This first instalment includes €58 million in grants to pay the salaries and pensions of civil servants and support the most vulnerable families. The remaining €92 million is provided by the European Investment Bank (EIB) to the Palestinian Monetary Authority through a dedicated credit line.

Subsequent disbursements of this short-term financial support are expected to follow in August and September, depending on progress in implementing the reform agenda by the PNA. “Our emergency assistance of €400 million supports a substantial reform agenda and paves the way for the recovery and reconstruction of Gaza,” said European Commission President Ursula von der Leyen, who noted that “a strong and reformed Palestinian Authority is critical to our common goal of a two-state solution.”

According to the understanding signed on July 19, by the end of August, the government of Mohammed Mustafa is to succeed in rationalizing public spending, reducing recurrent expenditures by at least 5 per cent compared to the previous year, instituting a retirement age for all West Bank workers, publishing a new law on social protection, and preparing an education reform plan. Preliminary actions agreed upon also include passing a law on electronic payments and improving access to justice and grievance mechanisms for citizens against government agencies.

At that point, in early September, the Commission will present a legislative proposal for a comprehensive program for Palestinian recovery and resilience, which will be designed to help the Palestinian Authority achieve a balanced budget by 2026 and ensure long-term financial sustainability, always subject to the constraint of implementing the agreed reform steps to make the embryonic Palestinian state a full-fledged public machine and a stable and credible interlocutor in the diplomatic effort toward the creation of a Palestinian state.