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Source: European Union (EU)
23 April 2009

Brussels, 23 April 2009

European Neighbourhood Policy – occupied Palestinian territory

“The release of this report is an opportunity to praise progress made by the Palestinian Authority Government, particularly in Public Financial Management and Governance and the rule of law, with European Commission assistance provided in both areas" said Commissioner Benita Ferrero-Waldner. “This progress has been achieved under very difficult circumstances: continued Israeli occupation and increasing political and institutional split between the West Bank and Gaza. The Commission will continue to support the reforms and the development programmes included in the Palestinian Reform and Development Plan."

EU–Palestinian Authority relations: basic facts

The Interim Association Agreement on Trade and Cooperation with the Palestinian Liberation Organisation on behalf of the Palestinian Authority is in force since 1997. The ENP Action Plan was adopted in May 2005.

Overall context and major developments in 2008

The overall political context: little progress in the implementation of the Action Plan until the first half of 2007. This changed after the EU resumed normal relations with the Palestinian Authority in mid 2007 and re-established political dialogue. The first ENP Joint Committee session in three years took place in May 2008 and decided the formation of four Sub-Committees. The first Sub-Committee on human rights, good governance and rule of law convened in December 2008.

The first political dialogue at the level of senior officials was held in Ramallah in December 2008. The political dialogue at ministerial level took place in September and November 2008 in New York and Marseille, respectively.

2008 saw some progress in several of the areas covered by the Action Plan and the Palestinian Authority undertook credible steps to implement the "Palestinian Reform and Development Plan". Most notable progress was achieved in the fields of public finance management, budget consolidation and security sector reform. The latter was reinforced by the Berlin Conference on civil security and the rule of law of June 2008.

However, political reform and institution building suffered a continued setback as a result of the split between the West Bank and the Gaza Strip that deepened in 2008. The Palestinian Legislative Council stopped its legislative activity, after the detention of more than half of its parliamentarians (mostly Hamas) in Israeli jails.

The Palestinian Authority Government in Ramallah was challenged by Hamas, which established a parallel “deposed” government in Gaza, weakening the institutional capacity of the Palestinian Authority.

The year 2008 ended with one of the most serious crises ever experienced in the Gaza Strip. Following the collapse of a six-month long truce between Hamas and Israel on 27 December Israel launched operation “Cast Lead” which lasted until 17 January 2009. Reportedly over 1,315 Palestinians were killed, of which 415 were children and 110 women, and over 5,500 wounded.

Overall economic growth in the occupied Palestinian territory in 2008 remained below 2% GDP, well below the population growth of 3.8%, leading to a continued decrease of per-capita income. Palestinian exports to the EU decreased dramatically by 49.1%, while imports from the EU increased by 37.1%.

The EU supports reforms in the occupied Palestinian territory by

· EU funding supports the implementation of the three-year Palestinian Reform and Development Plan presented by the Palestinian Authority at the Paris Donors' Conference in December 2007.

· The European Commission supported the Ministry of Social Affairs in reforming the social assistance system, building on the transfer of social allowances transferred by the PEGASE mechanism.

· To underpin the EU policy regarding East Jerusalem and alleviate the difficult conditions of the Arab population living there, the EC programme focusing on community services for the East Jerusalem inhabitants has been reinforced.

· Palestinian security forces were deployed in Nablus, Jenin, Hebron and Bethlehem. The EC supplied 36 vehicles to the Palestinian Civil Police. These vehicles are essential for the effectiveness of Public Order Units and constitute an important enhancement to the functionality of the Palestinian Civil Police as a whole.

· The conditions for training of judges and prosecutors were improved by the establishment of the EC-funded Palestinian Judicial Training Institutes.

· In the area of statistics, the European Commission signed a €1 million grant contract with the Palestinian Central Bureau of Statistics in September 2008 to support, the further analysis and subsequent dissemination of the findings of the population and housing census.

· In the area of energy the Palestinian Authority developed plans for a solar power plant in Jericho. The European Commission launched a pilot project on wind energy. In 2008, the Palestinian Authority, Israel and the European Commission re-launched trilateral energy cooperation with the aim of facilitating the joint Palestinian-Israeli “Solar for Peace” initiative and the establishment of a joint energy office. A European Commission financed study was undertaken to support this project.

· In the area of education the Tempus programme continued to support the development and reform of higher education. The National Tempus Office for the occupied Palestinian territory was re-opened in July, adding impetus to promotion and reform activities under the programme. And for the 2008-2009 academic year the Commission provided 80 Erasmus Mundus scholarships to Palestinian students and scholars.

· Through the Instrument of Stability, the European Commission supports the Office of the Quartet Representative Tony Blair.

Assistance to the Palestinians

The European Commission co-chaired the Paris Donor Conference in December 2007 where it pledged €440 million for 2008 in support of the Palestinian Reform and Development Plan.

Taking all contributions together (European Neighbourhood Partnership Instrument, Humanitarian Assistance and Instrument of Stability) total funding for the Palestinian people in 2008 amounted to €486 million.

The bulk of Community assistance has been provided for emergency assistance through the PEGASE mechanism, a European mechanism for channelling assistance to the Palestinian Authority established by the European Commission. PEGASE transferred contributions to the salaries and pensions of Palestinian Authority employees, social allowances to vulnerable families and payments for the fuel bill of the Gaza power plant. PEGASE transferred funds from the EU Budget as well as bilateral funds of 14 Member States.

Humanitarian aid in the areas of food aid, emergency job creation, health, psycho-social support, water and sanitation and protection has continued through ECHO in parallel. The EC has also maintained its support to UNRWA through a contribution to the General Fund of €66 million and several other projects exceeding an overall contribution of €113 million in 2008.

Additional €4.4 millions were programmed in 2007-2008 for the occupied Palestinian territory under the thematic programme “Non State Actors and Local Authorities in Development”.

The Communication from the Commission to the Parliament and the Council Implementation of the European Neighbourhood Policy in 2008 (23 April 2009) and a report on the occupied Palestinian territory are available at

More on the occupied Palestinian territory and ENP:

See also IP/09/625 EU reinforces ties with its neighbours and continues to support their reforms.

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