RAMALLAH, April 14, 2025 – The Government of Palestine has welcomed the European Union’s announcement of a new €1.6 billion financial support package over three years, aimed at supporting the Government’s efforts and development programs, strengthening the Palestinian economy, and promoting sustainable development, particularly amid the ongoing Israeli aggression across all Palestinian Territories.

This significant EU support is the outcome of months of intensive efforts and diplomatic engagement with European partners, under the guidance of President Mahmoud Abbas. It follows the convening of the High-Level EU-Palestine Political Dialogue on April 14 in Luxembourg, co-chaired by Prime Minister Dr. Mohammad Mustafa and EU High Representative for Foreign Affairs and Security Policy Kaja Kallas, and attended by Foreign Ministers from all 27 EU member states. The meeting marked a critical moment to bolster both political and financial support for Palestine.

The €1.6 billion package is structured around three main pillars:

• €620 million in direct budget support through the PEGASE mechanism, helping to cover essential recurrent Government expenditures and meet the essential needs of the Palestinian people.
• €576 million in development assistance for key sectors including electricity, water, education, and health. This includes vital projects designed to improve service delivery, create job opportunities, and develop infrastructure. It also comprises €82 million in annual support for UNRWA, reaffirming the EU’s continued commitment to the rights of Palestinian refugees and the rejection of forced displacement and attacks on refugee camps.
• €400 million in loan from the European Investment Bank (EIB), earmarked to strengthen the Palestinian banking and private sectors, thereby enhancing lending capacity and stimulating economic growth in the face of mounting challenges facing the national economy.

The Government stressed that this substantial European contribution comes at a critical moment, as the Palestinian people continue to be subjected to relentless aggression, genocidal war, forced displacement, and suffocating economic siege.

This support, it emphasized, reflects the European Union’s principled commitment to the Palestinian cause and the two-State solution, and will help strengthen the resilience of Palestinian institutions to continue delivering services despite the exceptionally difficult and dire humanitarian conditions, as well as the mounting challenges.