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EU Launches €1.6 Billion Aid Package for Palestinian Authority with Reform Conditions

The European Union ties financial support to governance improvements as high-level talks with Palestinian leaders begin in Luxembourg.

Family and neighbours watch as volunteers and emergency workers search for survivors at Manoun family's house after it was targeted by an Israeli army strike in Jabalia al-Balad, Gaza City, Sunday, April 13, 2025. (AP Photo/Jehad Alshrafi)
European Commissioner for Mediterranean Dubravka Suica speaks to the media in Brussels, Belgium March 17, 2025. REUTERS/Yves Herman/File Photo

Overview

  • The European Union has announced a three-year, €1.6 billion financial support package for the Palestinian Authority (PA), aimed at fostering governance reforms and credibility.
  • The package includes €620 million for financial support and reforms, €576 million for resilience and recovery in the West Bank and Gaza, and €400 million in loans from the European Investment Bank, pending approval.
  • EU officials emphasize that the aid is contingent on the PA addressing corruption and strengthening governance to enhance its role as a credible interlocutor in the region.
  • The announcement coincides with a high-level political dialogue in Luxembourg involving EU foreign ministers and Palestinian Prime Minister Mohammad Mustafa.
  • Israeli Prime Minister Benjamin Netanyahu's government opposes the idea of the PA assuming control of Gaza, complicating the EU's broader vision for regional stability and a two-state solution.