The European Commission announced today the provision of short-term emergency financial support to the Palestinian Authority, amounting to €400 million in the form of grants and loans, in three installments between the current July and next September, to address its most urgent financial needs.

Ursula von der Leyen, President of the European Commission, mentioned in a statement that an agreement has been signed with the Palestinian government, outlining a strategy to address the critical financial situation of the Palestinian Authority and the Palestinian economy, which has been exacerbated by the ongoing Israeli war on the Gaza Strip for more than 9 months.

She pointed out that the strategy aims to stabilize the Palestinian Authority and the economy in the West Bank, laying the foundations for recovery and building resilience, and will also aim to create better conditions for the reconstruction of Gaza when the realities on the ground allow for it.

The statement clarified that the short-term financial support will pave the way for a comprehensive program for Palestinian recovery and resilience, adding that funding from other donors will also be needed; proposing the establishment of a coordination platform among donors for Palestine starting in the fall of 2024, until the end of 2026, with the Commission to present a legislative proposal for this program in early September, so that payments can begin before the end of the year.

The statement continued: "The multi-year support program should enable the Palestinian Authority to achieve budget stability by 2026 and ensure its financial sustainability in the long term thereafter, and the program will begin in the fall of 2024 and continue until the end of 2026," confirming that the resources required for the reconstruction of the Gaza Strip are not covered by this program and should be determined separately as part of a broader collective effort by the international community.

The statement pointed out that the European Union is the largest provider of external aid to the Palestinians, with a value of about €1.2 billion for the period from 2021/2024, under the joint European strategy, of which €809.4 million has already been approved.

For its part, the Palestinian government welcomed the EU's response to its request for emergency financial support, which represents an important step in contributing to alleviating the severe financial and economic crisis faced by the Palestinian people, which has worsened following the Israeli aggression on the Gaza Strip.

The Palestinian government considered, in a statement, that the package of emergency European aid and the subsequent plan for financial stability represent an important foundation to enhance the efforts of national institutions in providing services to citizens, confirming its continuous efforts to secure the inclusion of other international and Arab parties in the efforts to improve the financial and economic situation in Palestine, to fulfill its commitments to public employees and service providers, and to pave the way for a new phase of economic recovery and empower the private sector and address the issue of unemployment.