The European Commission decided today to provide an initial financial package worth €100 million for the Occupied Palestinian Territory under the 2011 budget.

EU High Representative for Foreign Affairs and Security Policy/Vice-President of the European Commission Catherine Ashton stated: "This decision is a sign of the strong political and financial commitment of the European Union to the Palestinian Authority and to Prime Minister Fayyad's leadership in building a democratic and viable Palestinian state. Palestinian statehood is critical for any peaceful, workable and lasting solution to the conflict”.

In announcing the package Commissioner for Enlargement and Neighbourhood policy Štefan Füle said: "By today's decision the Commission wants to give a signal to the Palestinian people that they can count on our continued support in 2011 as in the past. Our support will be channelled through PEGASE. The Union trusts that Member States and other donors will continue supporting the Palestinian people through this mechanism."

Today's decision, by which the EU fulfils by far the pledges made at the Paris Donors' Conference in December 2007, will help the Palestinian Authority to continue providing essential public services across all the occupied Palestinian territory. Of today's announced package, €60 million will be channelled through the EU's assistance mechanism for the Occupied Palestinian Territory, PEGASE¹, which was launched in February 2008. These funds will help the PA to cover wages and pensions for essential civilian workers (particularly medical and teaching staff).

So far the Commission has already provided €696 million in direct financial support to the Palestinian Authority through this mechanism, with EU Member States contributing a further €265 million.

The remaining €40 million will be allocated to the core budget of UNRWA, the United Nations Relief and Works Agency. UNWRA provides basic health, education and social safety net services for a refugee population of 4.7 million people since 1949. The EU and its Member States are the biggest donors to UNRWA.

Background

Aid to the Palestinian Authority is provided to support the implementation of the Palestinian Reform and Development Plan (PRDP), presented by the PA at the donor conference in December 2007, held in Paris. Moreover, in August 2009, PM Fayyad presented the PA's "Programme of the Thirteenth Government". Based on the PRDP, the plan aims at building strong governmental institutions which will serve as the basis for a future independent Palestinian State within a two-year time-frame. The EU has expressed its political and financial support for PM Fayyad's plan. Further to this support and to some partial and insufficient easing of restrictions on movement and access in the West Bank, the reform agenda of Prime Minister Fayyad has translated into economic and social progress. The situation in Gaza remains however unsustainable. This first tranche of financing for 2011 responds to the priorities of the PA in supporting recurrent expenditure, including social allowances in Gaza and the needs of UNRWA to support Palestine refugees.