The European Commission is the biggest donor of external assistance to the Palestinians. Its support is based on a joint partnership, founded upon the Interim Association Agreement on Trade and Cooperation. It was signed in 1997 between the European Community and the PLO on behalf of the Palestinian Authority. The EU-Palestine Action Plan was approved in May 2013 setting the agenda for economic and political cooperation with the EU and remains in place until 2020.

European Neighbourhood Instrument (ENI)

Bilateral Cooperation

The European Neighbourhood Instrument (ENI) is the main EU financing instrument for Palestine.

Aid is allocated along a multiannual bilateral agenda for economic and political cooperation. From 2014 till 2016, this agenda was articulated in the Single Support Framework, which as from 2017 has been replaced by the "European Joint Strategy in support of Palestine 2017-2020 – Towards a democratic and accountable Palestinian State". It is the fruit of several years of work between the EU and its Member States and sets out targeted and mutually shared priorities of EU and Member States cooperation with Palestine developed through the last years. It mirrors financing assistance to a coherent EU foreign policy approach.

For the period 2017-2020, the EU's bilateral assistance to Palestine under the ENI will focus on the following priority sectors:

• Governance Reform, Fiscal Consolidation and Policy
• Rule of Law, Justice, Citizen Safety and Human Rights
• Sustainable Service Delivery
• Access to Self-Sufficient Water and Energy Services
• Sustainable Economic Development

The indicative multi-annual financial ENI allocation for 2017-2020 is between €1.11 billion and €1.356 billion

The European Joint Strategy is in line with the Palestine National Policy Agenda (NPA) 2017-2022, adopted by the Palestinian Authority in December 2016 and follows up on the priorities of EU cooperation with Palestine developed over the last years.

Within the priorities set by the Joint Strategy the bilateral cooperation portfolio in Palestine is articulated in :

  i) Direct Financial Support

The EU is helping the Palestinian Authority to meet its recurrent expenditure by contributing to the payment of salaries and pensions, to the assistance of vulnerable Palestinian families, to the elimination of arrears of East-Jerusalem hospitals and to the delivery of public services. This support is channeled through the PEGASE instrument. It is accompanied by a policy dialogue aimed at reforms. An incentive-based framework introduced early 2018 links this support to a selected number of PA's policy advancements in key sectors.

In 2018, the contribution to PEGASE reaches €152.5 million, of which €85 million for salaries and pensions, €50 million in support to the most vulnerable Palestinian families and €13 million for the East Jerusalem’s hospitals. PEGASE is open for contributions, free of administrative charges, from Member States and other donors.

  ii) Support to Palestine refugees

Today, the European Union - European Commission and EU Member States - is the largest multilateral provider of international assistance to Palestine refugees. The funding is used to cover UNRWA's crucial core programmes in the areas of health, education and social services, including salaries for teachers, doctors and social workers active in refugee camps.

The baseline ENI contribution to UNRWA amounts to €82 million yearly as agreed in the joint declaration between the EU and UNRWA. It has reached EUR 102 million in 2017 to respond to the huge financial needs UNRWA was facing and particularly to keep schools open in Palestine. UNRWA receives further, though smaller, contributions from the EU humanitarian aid, the food security programme (under the Development Cooperation Instrument) and the Instrument contributing to Stability and Peace (IcSP).

  iii) Development programmes

EU-funded development programmes in Palestine are in line with priorities set by the Joint Strategy, in line with the Palestinian Authority National Policy Agenda and focus on the 5 main areas mentioned above (with a particular focus on Gaza and Area C development):

In addition, every year between € 8 and 15 million are allocated for projects in East Jerusalem, which is a key priority to keep the two-state solution alive. In 2017 the contribution for the East Jerusalem Programme amounted to €14.9 million.

Regional cooperation

Together with Israel and Jordan, Palestine participates to the European Peacebuilding Initiative (former Partnership for Peace programme). Its overall objective is to facilitate the peace process by supporting a solid foundation at civil society level for a just and lasting settlement in the Middle East. The programme receives an annual contribution of €5 million.

Other financing instruments

Palestine is also eligible for funding under the following EU’s thematic programmes, such as the European Instrument for Democracy and Human Rights (EIDHR - €1.3 million annually) or the Non-state Actors and Local Authorities thematic programme. It also receives support through the Development Cooperation Instrument (DCI) and benefits from a significant share of EU humanitarian assistance.

Palestinian students also remain eligible to benefit from the Erasmus+ programme.

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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