Brussels – (The Brussels Morning Newspaper) – The European Commission and the Palestinian Authority arrange emergency financial backing and the regulations for a recovery and resilience programme.
The European Commission and the Palestinian Authority have marked a Letter of Intent which outlines a strategy for managing the critical budgetary and fiscal position of the Palestinian Authority and the Palestinian economy, whose structural exposures have been exacerbated by the effects of the war in Gaza and much-needed uncertain developments and reforms.
European Commission President Ursula von der Leyen stated: “Israelis, Palestinians and the entire region deserve stability, security and stability. The two-state solution is the best way to ensure this. With this joint strategy, we are helping the Palestinian Authority’s reform efforts. Together, we are laying the groundwork for economic and political strength in the West Bank. And we are setting the footing for the reconstruction of Gaza. We need an instantaneous and enduring ceasefire. And we must prepare for the day after.”
What Are the Goals of the EU-Palestine Agreement?
EU Commission states that the strategy strives to stabilise the Palestinian Authority and the economy in the West Bank. Associated with a substantial and credible reform schedule by the Palestinian Authority, it is laying the foundations for healing and building resilience. The strategy will also strive to create better conditions for the reconstruction of Gaza once the events on the ground allow this.
How Will the EU’s Strategy Stabilize the Palestinian Economy?
As a first stage, the EU will deliver short-term emergency financial backing to the Palestinian Authority to address its most critical financial needs and support its substantial and reasonable reform agenda. The financial support, about €400 million in donations and loans, will be spent in three payments between July and September 2024, subject to improvement in the implementation of the reform plan of the Palestinian Authority.
The short-term financial backing will pave the path for a Comprehensive Programme for Palestinian Recovery and Resilience. A grant from other donors will also be required; the Commission is, therefore, offering to set up a Palestine donor coordination platform as of autumn 2024, until the end of 2026.Â
What Does the EU’s Support Mean for Palestinian Governance?
The Palestinian Authority’s reform process strives to ensure budgetary sustainability while updating the Palestinian leadership and its governance, fighting corruption, promoting the rule of law and transparency, improving the social security and education systems, enhancing the business environment, and maintaining the foundations of a market-based economy. All disbursements will be established on the Palestinian Authority’s advancement towards the agreed-upon reform milestones. The resources needed for the reconstruction of Gaza are not protected as such by this Programme and will need to be recognised separately as part of a wider collective action by the international community.
How Will the EU’s Financial Backing Affect the Palestinian Authority?
The Palestinian Authority and the Commission decided to establish a donor coordination platform to streamline authorisation to the Palestinian Authority in collaboration with key international partners. Additionally, the programme strives to contribute to enhancing economic and financial connections between Israel and the Palestinian Authority, including periodic payments of the clearance tax revenues due to the Palestinian Authority and the reduction of access restrictions on Palestinian workers.
