EU sends €400 million to Palestinian Authority in financial support

The European Union is to send the Palestinian Authority (PA) financial aid worth €400 million ($435 million) in loans and grants over the next three months.

The European Commission announced the financial assistance package on Friday but stressed in a statement that the funds are "subject to progress in the implementation of the reform agenda" of the PA.

The €400 million is to be disbursed in three payments between July and September and is designed to stabilize the financially-stricken PA and the economy in the West Bank.

The PA governs in parts of the West Bank and was driven out of Gaza by the Palestinian Islamist organization Hamas who seized control by force in 2007. Israel controls the coastal territory's land and sea borders, as well as its airspace.

Some EU member states like Germany believe the PA could play an important role in the post-war order in the Gaza Strip.

Freshly re-elected European Commission President Ursula von der Leyen said the funds help lay the basis for "economic and political stability in the West Bank" and for the reconstruction of Gaza.

The commission wants to follow the short-term financial assistance with long-term multi-annual support from a donor coordination platform to begin in the autumn of 2024 and run until the end of 2026.

The EU executive arm said it will start the process in September to help the PA reach "long-term financial sustainability" but stressed again the financial support will be linked to PA reforms.