€40 million to Palestinian Authority in PEGASE mechanism

The European Union has provided an additional €40 million to the Palestinian Authority to help meet its recurrent expenditures and ensure the continued delivery of public services. The funds will be used to help pay for salaries and pensions, social allowances to vulnerable Palestinian families and fuel for the power plant to provide electricity to the people of Gaza. This amount comes on top of the €440 million that the European Commission pledged last December in Paris to assist the Palestinians in 2008.

A €37 million public infrastructure investment programme has been launched (19/08/2008) to bring benefits to the Palestinian people by improving the delivery of public services. The programme will help to upgrade public infrastructure in areas identified by the Palestinian Authority as priorities for new investment, including security and the rule of law and electricity. All the funds are channelled through the European Union assistance mechanism for the Palestinians, PEGASE. Priority projects are the construction of new security forces headquarters (Muqata'a) in Nablus, thereby helping to strengthen the ability of the Palestinian Authority to provide security to its citizens.

Remaining funds – including the additional €40 million provided by the EU – will be agreed between the PA and the EU in the coming weeks, according to the priorities set out in the Palestinian Reform and Development Plan. The programme can pay for projects in both the West Bank and Gaza. This builds on an ongoing programme of EU investment in public infrastructure, worth over €26 million, which is managed directly by the PA.


The enlargement of the European Union on 1 May 2004 has brought a historical shift for the Union in political, geographic and economic terms. The EU and the Palestinian Authority, as close neighbours, will reinforce their political and economic interdependence. Enlargement offers the opportunity for the EU and the Palestinian Authority to create the conditions for developing an increasingly close relationship in preparation for a future Palestinian State, going beyond co-operation, to involve a significant measure of economic integration and deepening of political cooperation.

The European Neighbourhood Policy of the European Union sets ambitious objectives based on commitments to shared values and effective implementation of political, economic, social and institutional reforms.