The European Union has announced a new €1.6 billion aid package to the Palestinian Authority over the next three years, aiming to provide a financial lifeline amid worsening conditions in the West Bank and Gaza. The move signals Europe’s ongoing commitment to stabilizing the region — even as other Western powers align themselves more closely with Israel’s siege and military escalation.

The funding includes €620 million in direct support tied to governance reforms, €576 million for infrastructure recovery in war-torn areas, and up to €400 million in loans via the European Investment Bank. While the EU has framed the package as conditional on reforms, critics point out that such conditions are rarely imposed on Israeli institutions — despite decades of documented abuses, illegal settlement expansion, and refusal to engage in a genuine peace process.

“We want them to reform themselves because without reforming, they won’t be strong enough and credible in order to be an interlocutor, not only for us, but also for Israel,” said Dubravka Šuica, the European Commissioner for the Mediterranean — a statement that underscores how even humanitarian aid to Palestinians is filtered through Israel’s strategic interests.

The announcement came during meetings in Luxembourg between EU foreign ministers and Palestinian Prime Minister Mohammad Mustafa. European diplomats hope the PA can eventually play a governing role in Gaza, should Israel end its military occupation — though the Netanyahu government has flatly rejected such a handover.

Instead, Israel continues to treat the PA with suspicion, while expanding settlements, detaining thousands without trial, and blocking reconstruction efforts. In that context, many see the EU’s strategy as flawed — trying to bolster a leadership that lacks real autonomy, under occupation, and without guarantees of international enforcement.

Still, with the humanitarian catastrophe in Gaza worsening by the day, and the PA increasingly sidelined both by Israel and its own internal crises, Europe’s financial support may be one of the few tools left to prevent total institutional collapse in the Palestinian territories.

Whether it can make a difference without directly confronting Israeli obstruction remains to be seen.