The European Union is the biggest provider of external assistance to the Palestinians. In line with the goal of a 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 working to enhance reforms that reinforce the Palestinian Authority’s transparency and accountability, with a view to reinforce its role and credibility.

The EU’s support is based on joint partnership, 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 was approved in May 2013, setting the agenda for economic and political cooperation with the EU. It remains in place until 2020.

Bilateral Cooperation

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

EU funding is allocated in line with the multiannual bilateral agenda for economic and political cooperation. From 2014 until 2016, this agenda was articulated in the Single Support Framework, which was replaced in 2017 by the European Joint Strategy in support of Palestine 2017-2020 – Towards a democratic and accountable Palestinian State. It sets out targeted and mutually shared priorities of the EU and Member States.

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 indicative multi-annual financial allocation under the ENI for 2017-2020 is between €1.11 billion and €1.36 billion. The EU is active in the Gaza Strip and throughout the West Bank, including Area C and East Jerusalem.

The European Joint Strategy is in line with the Palestine National Policy Agenda 2017-2022, adopted by the Palestinian Authority in December 2016.

Within the priorities set by the Joint Strategy, the bilateral 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, to assistance provided to the most vulnerable Palestinian families and to the costs of East Jerusalem hospitals. This support is channelled through the PEGASE** instrument. It is accompanied by a policy dialogue aimed at encouraging reforms, e.g. an incentive-based framework links part of this support to reforms in key sectors.

In 2019, the contribution to PEGASE reached €154.45 million, of which €85 million for salaries and pensions, €50 million in support to the most vulnerable Palestinian families and €13 million for East Jerusalem hospitals.

  ii) Support to Palestine refugees

The EU - European Commission and EU Member States - is by far the largest provider of assistance to Palestine refugees. The funding is used to cover the United Nations Relief and Works Agency for Palestine Refugees in the Near East’s (UNRWA) core responsibilities in the areas of health, education and social services, including salaries for teachers, doctors and social workers active in refugee camps.

The ENI contribution to UNRWA in 2018 and 2019 amounted to €260 million including ENI contributions to the programme budget, contributions from the EU Regional Trust Fund in response to the Syrian Crisis, the 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. The Gaza Central Desalination plant is a flagship programme supported by the EU in cooperation with Arab donors via the Islamic Development Bank that aims to ensure that the Gazan population has access to drinking water.

In 2019 the very first TWINNING project started in Palestine in the field of Customs. During 2019 Palestine benefited from 16 TAIEX events. In addition, €12 million are allocated for projects in East Jerusalem, which is a key priority to keep the two-state solution alive.

Regional cooperation

Together with Israel and Jordan, Palestine participates in 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 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.

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’s 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

Palestine benefits from a significant share of EU humanitarian assistance.

Palestine participates in the Erasmus+ programme, which enhances mobility and co-operation with the EU in the field of higher education. Under this programme, close to 1,300 Palestinian students, professors and university staff travelled to Europe and 550 Europeans counterparts travelled to Palestine between 2015 and 2018.

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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