EU announces €1.6bln financial aid package for Palestinian Authority

The European Union has unveiled a financial aid package of up to €1.6 billion to support the Palestinian Authority (PA) and fund projects in the West Bank, Jerusalem and the Gaza Strip.

The offer comes as Israel expanded its military offensive across Gaza over the weekend.

More than a third of the money, to be provided over two years, will come as direct budget support to the PA and is aimed at improving financial sustainability, democratic governance and services to help the private sector develop.

“Our programme aims to support the Palestinian people in building a sustainable future,” said EU Mediterranean Commissioner Dubravka Šuica.

“It’s about the governing capacity. It’s about advancing economic recovery. It’s about strengthening the resilience of the private sector.”

Speaking to reporters after talks in Luxembourg with Palestinian Prime Minister Mohammad Mustafa, she said “a well-functioning and reformed Palestinian Authority must play a central role in the post-conflict governance of Gaza. This is our position.”

Over €576 million in grants will go to fund projects in several sectors across the Palestinian territories, with €82 million going to the UN agency for Palestinian refugees, UNRWA.

The private sector can benefit from up to €400 million euros in low-cost loans from the EU, the world’s largest aid donor to the Palestinians.

Meanwhile, on Sunday Israel struck a hospital in northern Gaza, forcing patients to evacuate as attacks intensified across the Strip. 

Gaza’s Health Ministry said the pre-dawn strike hit the Al-Ahli Hospital in Gaza City after Israel issued an evacuation warning.

At least one patient died during the evacuation as staff couldn’t provide urgent care. 

Israel said it struck a Hamas command centre in the hospital. It also claimed that prior to the strike, steps were taken to mitigate harm.

Hamas described the Israeli targeting of the hospital as a “new war crime” and said it was part of a series of attacks targeting the health infrastructure in Gaza.

The war in Gaza started after Hamas fighters carried out an attack on southern Israel on 7 October, 2023, killing 1,200 people, mostly civilians. 

251 hostages were taken, most of whom have since been released as part of negotiations between the two parties. 59 hostages remain, 24 of which are believed to still be alive. 

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The Hamas-run health ministry says more than 50,000 Palestinians have been killed in Gaza but doesn’t differentiate between combatants and civilians in its tally.