European Commission releases 500 million Euros for benefit of Palestinian authority

The European Commission reported today, Friday, July 19, 2024, that it will provide the Palestinian Authority with emergency financial aid amounting to €400 million (approximately $435.5 million) amid fears within the European Union about the possibility of a collapse of the Authority.

The Commission added in its statement that the funds will be disbursed in three tranches in the form of grants and loans during the period from July to September, depending on the improvement made in the implementation of the reform program of the Palestinian Authority.

The European Commission earlier signed a letter of intent with the Palestinian Authority outlining a strategy to address its financial and budgetary situation.

“Together we are laying the foundations for economic and political stability in the West Bank,” said Ursula von der Leyen, President of the European Commission.

The Palestinian Authority’s public finances have suffered a crisis for years after donor countries cut funding, which previously covered almost a third of its $6 billion annual budget, demanding reforms to fight financial corruption and wasteful spending.

But Palestinian officials state the situation deteriorated sharply after Hamas launched an attack in the southern occupied territories on October 7, prompting Israel to withhold tax revenues it collects on behalf of the Palestinian Authority.

Tax revenues constitute the primary source of financing for the Palestinian Authority.

The Palestinian Prime Minister’s Office stated: “The Palestinian government welcomed the European Union’s response to its request for emergency financial support, which is an essential step in helping to alleviate the stifling financial and economic crisis facing our people, which worsened after the Israeli aggression against Gaza.”