Palestine*

EU and Palestine

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.

Relation between the EU and Palestine 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 was approved in May 2013, setting the agenda for economic and political cooperation with the EU. The Action Plan was recently prolonged for additional three years, until 2025.

Bilateral Cooperation

On 9 February 2021, the European Commission adopted a Joint Communication on the renewed partnership with the Southern Neighbourhood, establishing a new Agenda for the Mediterranean to relaunch and reinforce the EU’s partnership with the region. This is the basis for the current cooperation framework between the EU and Palestine.

EU’s assistance to Palestine is primarily funded through the Neighbourhood and Development Cooperation Instrument – Global Europe (NDICI-GE) for the period 2021 to 2027. From 2021 to 2024, bilateral assistance to the country amounted to €1.13 billion.

The setting out targeted and shared priorities of the EU and the EU Member States, was adopted on 22 November 2022. It is aligned with the Palestine National Policy Agenda 2017-2022, adopted by the Palestinian Authority in December 2016. In continuity with the previous Strategy for 2017-2020, focus is put on five interrelated pillars (Democracy, Rule of Law and Human Rights; Governance Reform, Fiscal Consolidation and Policy; Sustainable Service Delivery; Climate Change, Access to Self-Sufficient Water and Energy Services; Sustainable Economic Development).

The EU’s multi-annual financial allocation for Palestine under the European Joint Strategy 2021-2024 amounts to €1.177 billion.

The EU’s cooperation portfolio in Palestine is implemented in different ways:

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.

ii) Support to Palestine refugees

The EU is one of the largest providers 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.

For 2021 to 2024, the EU’s contribution to UNRWA’s programme budget under NDICI amounted to €363 million. 

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.

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.

The European Commission is currently developing a more substantial multi-annual support programme for the Palestinian Authority to strengthen its capacity in view of a two-state solution and safety and security in the region.

The Joint Communication is accompanied by a Economic and Investment Plan for the Southern Neighbourhood (EIP) to strengthen resilience and build prosperity in the region. The EIP implements the Global Gateway in the region. EIP projects implemented in Palestine include: 

• Sustainable Use of Natural Resources and Energy Finance (SUNREF II), guiding the private sector towards a greener economy, with a primary focus on green energy
• Northeast Ramallah Wastewater collection, building a new wastewater collection system for 14 municipalities, trunk lines leading to its solar photovoltaic panels to contribute to its energy needs
• Sustainable Growth 4 All, aiming at enabling the uptake of green and sustainable investments and promoting access to finance and know-how for micro and SMEs, in particular female entrepreneurship and financial inclusion

More on EU-Palestine relations: Factograph - EU-Palestine relations - European Commission

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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}

Further information

Factsheets available to download