EU announces major aid package to bolster Palestinian Authority
- The European Union will distribute a financial aid package of 1.6 billion euros over two years to support the Palestinian Authority.
- The aid aims to enhance the Palestinian Authority's financial sustainability and improve services in the West Bank and Gaza.
- This funding is a crucial component of the EU's efforts to support stability in the region and facilitate the two-state solution.
On April 14, 2025, the European Union declared a significant financial aid package intended to support the Palestinian Authority amidst ongoing crises in the region. The aid, amounting to 1.6 billion euros (approximately $1.8 billion), is slated to be distributed over the span of two years and comprises direct budget support to the Palestinian Authority. This funding aims to bolster financial sustainability, enhance democratic governance, and provide essential services to stimulate private sector development. The announcement coincided with Israel’s continued military operations in Gaza, compounding the challenges faced by the Palestinian Authority and its efforts to stabilize the region. EU officials have emphasized the importance of a well-functioning and reformed Palestinian Authority to play a central role in governing Gaza following conflicts. Over one-third of the allocated funds will directly support the Palestinian Authority’s budget, while approximately 576 million euros is earmarked for various economic projects throughout the West Bank and Gaza. European Commissioner Dubravka Šuica highlighted the aid package's objectives, stressing the importance of supporting the Palestinian people in creating a sustainable future and reinforcing the private sector's resilience. The financial resources are also intended to address the severe fiscal deficit faced by the Palestinian Authority, which has been experiencing significant revenue shortfalls primarily due to the withholding of taxes by Israeli authorities. This funding aims to facilitate necessary reforms and improvements in governance structures, thereby paving the path for future economic recovery. Moreover, the Palestinian Authority requires between 9 to 12.5 billion dollars to meet its needs from 2024 to 2026, according to statements from European officials. The aid package was discussed further during meetings with Palestinian Prime Minister Mohammad Mustafa, who met with the 27 EU foreign ministers to discuss the situation, highlighting ongoing EU support despite challenges posed by the geopolitical environment. Consequently, the EU continues to seek a balanced resolution based on the two-state solution framework, advocating for the strengthening of the Palestinian Authority despite potential opposition from Israel.