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 prolonged in December 2018 for a period of three years.

Bilateral Cooperation

The European Neighbourhood Instrument (ENI) is the main EU financing instrument for Palestine. EU funding is allocated in line with the multi-annual European Joint Strategy in support of Palestine 2017-2020 – Towards a democratic and accountable Palestinian State. 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.

The multi-annual financial allocation for Palestine under the ENI for 2017-2020 amounts to €1.28 billion.

For the period 2017-2020, the EU's bilateral assistance to Palestine under the ENI focuses 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 EU’s cooperation portfolio in Palestine focuses on:

  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 2020, the total EU contribution to PEGASE amounts to €159.05 million of which  €85 million for salaries and pensions, €22,5 million to support the response of the East Jerusalem Hospitals to COVID-19 and €45 million to support the incomes of the most vulnerable households.

  ii) Support to Palestine refugees

The EU with its Member States is by far the largest provider 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 and 2020 was €395.6 million including ENI 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.

  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. The Gaza Central Desalination Plant is a flagship programme supported by the EU, in cooperation with Arab donors via the Islamic Development Bank. It aims to ensure that the Gazan population has access to clean drinking water by providing a minimum of 55 million m3 of safe and clean drinking water per year. Parts of the Associated Works have already started in 2019.

In 2019 the first twinning project started in Palestine in the field of customs. Palestine benefited from 17 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.

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 European Instrument for Democracy and Human Rights (€1.3 million annually) 
• The Development Cooperation Instrument and more specifically the Non-State Actors and Local Authorities thematic programme. EU humanitarian assistance (more than €793 million since 2000)
• the Erasmus+ programme, which enhances mobility and co-operation with the EU in the field of higher education. Under this programme, over 1,880 Palestinian students, professors and university staff travelled to Europe and up to 874 European counterparts travelled to Palestine between 2015 and 2019.

Factsheets available to download:

• Annual Opinion Survey results: 2020

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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