EU freezes development aid to Palestinians after Hamas attack

Andrew Grav & Sarah Marsh

Reuters  /  October 9, 2023  

BRUSSELS/BERLIN – The European Commission said on Monday it was putting all of its development aid for Palestinians, worth 691 million euros ($729 million), under review and immediately suspending all payments following Hamas’ attack on Israel.

Germany and Austria earlier on Monday said they were suspending bilateral development aid to Palestinians, while others such as Italy had said suspending aid was not up for discussion.

Europe is one of the main sources of aid to the Israeli-occupied Palestinian territories where the United Nations estimates that around 2.1 million people need humanitarian assistance, among them 1 million children. It is unclear whether the suspensions in development aid will also apply to such assistance.

The commission did not immediately respond to a request to clarify this.

“The scale of terror and brutality against Israel and its people is a turning point,” Oliver Varhelyi, the European Commissioner for Neighbourhood and Enlargement, said in a post on social media. “There can be no business as usual.”

Hamas militants killed hundreds of Israelis and abducted dozens in the deadliest such incursion since the Yom Kippur war 50 years ago, prompting Israel to retaliate with its heaviest ever bombardment of Gaza, which has killed more than 400 people.

Varhelyi said all new budget proposals for Palestinian aid were also postponed until further notice. “The foundations for peace, tolerance and co-existence must now be addressed,” he said.

“Incitement to hatred, violence and glorification of terror have poisoned the minds of too many,” he added. “We need action and we need it now.”

European Union foreign ministers will hold an emergency meeting on Tuesday to discuss the situation, including reviewing aspects of development aid, officials said on Monday. Total EU assistance earmarked for the Palestinian people under the 2022 budget allocation was 296 million euros.

Neither the EU Commission, Germany or Austria differentiated between Gaza, the Palestinian enclave ruled by Hamas, and the much larger West Bank run by the Western-backed Palestinian Authority led by President Mahmoud Abbas, whose Fatah movement is a rival to Hamas.


Austrian Foreign Minister Alexander Schallenberg said the country was suspending development aid totaling around 19 million euros ($20 million) for a handful of projects.

Neutral Austria’s ruling conservatives have adopted one of the most pro-Israel stances in the European Union in recent years. The Israeli flag has been hoisted above the chancellor’s office and the Foreign Ministry after the shock Hamas assault.

In Germany, Development Minister Svenja Schulze of the Social Democrats said no payments were currently being made for bilateral aid projects as Berlin re-examined its engagement with the Palestinian territories.

“This is also an expression of our unbreakable solidarity with Israel,” she told a news conference. “We are in contact with our partners there and reviewing everything again.”

Germany’s development ministry has earmarked 250 million euros in development funds for bilateral projects in the Palestinian territories for this and next year. It did not say how much of that it had already disbursed this year.

German politicians have over the past days emphasized their country’s particular duty towards Israel and its security given the historic responsibility for the Holocaust. The Israeli flag was projected on Saturday night onto Berlin’s landmark Brandenburg Gate.

Still, some politicians have pushed back against the decision to suspend aid, saying Hamas but not all Palestinians were responsible for the attack.

Moreover a spokesperson for the Greens-run foreign ministry said it would continue to disburse the 73 million euros it had earmarked for Palestinians – which were separate to the development ministry funds, and most of which had already been spent.

The foreign ministry funds via international organizations and the United Nations meaning Germany is bound to disburse what it has pledged, a government source said.

Asked if Italy would follow Germany and Austria in suspending development aid, the foreign ministry spokesperson said this was not under discussion.

A spokesperson for Prime Minister Rishi Sunak, asked whether Britain planned to follow Austria and Germany, said Britain had previously provided aid to Palestinian refugees via the United Nations and he was not aware of plans to change the approach.

Reporting by Andrew Gray in Brussels, Francois Murphy in Vienna, Sarah Marsh and Markus Wacket in Berlin; additional reporting by Angela Amante in Rome and Kate Holton in London; editing by Mark Heinrich, Alison Williams and Nick Macfie


 EU Commission suspends ‘all payments immediately’ to the Palestinians following the Hamas attack

Raf Casert

AP  /  October 9, 2023

BRUSSELS – European Union Commissioner Oliver Varhelyi said Monday the bloc is suspending “all payments immediately” to the Palestinians because of what he called the “scale of terror and brutality” during the attacks on Israel by Hamas.

The surprise announcement by Varhelyi came just hours after EU officials stressed that no EU money whatsoever was going to Hamas in the first place and that contacts had been frozen for 16 years. The EU considers Hamas a terror group.

Queries about what the move entailed and whether it would hit all humanitarian aid to Palestinians were not immediately answered.

Varhelyi said that “as the biggest donor of the Palestinians, the European Commission is putting its full development portfolio under review,” which he said amounted to 691 million euros.

Varhelyi said that the measures include that “all payments (be) immediately suspended. All projects put under review. All new budget proposals … postponed until further notice.”

The EU says it is the biggest donor to the Palestinian people and has been advocating for years for the two-state approach that has guided international diplomacy since the 1993 Oslo peace accords between Israel and the Palestine Liberation Organization.

EU foreign ministers are slated to meet in Muscat, Oman, on Tuesday to discuss the situation and see what actions should be taken. Varhelyi’s announcement seemed to preempt the discussions.

“There can be no business as usual,” Varhelyi said on X, formerly known as Twitter.

“The foundations for peace, tolerance and co-existence must now be addressed. Incitement to hatred, violence and glorification of terror have poisoned the minds of too many,” the commissioner wrote.

During an earlier briefing Monday, the EU Commission sought to draw a clear line between Hamas, which it considers a terrorist organization, and the Palestinian people, who are in need of humanitarian aid.

According to the bloc, it has provided humanitarian aid to help meet Palestinians’ basic needs since 2000 through the European Commission’s humanitarian aid department (ECHO) and the UN Office for the Coordination of Humanitarian Affairs (OCHA). Since 2000, ECHO has provided 700 million euros of humanitarian aid to Palestinians in the Gaza Strip and the West Bank.

The EU’s most populous member, Germany, and its neighbor Austria also said they were suspending development aid for the Palestinian areas.

The Development Ministry in Berlin said there was no direct German financing of the Palestinian Authority, but a total of 250 million euros ($265 million) is currently pledged in German aid — half of that for bilateral projects via Germany’s overseas aid agency and development bank and the other half for the U.N. agency for the Palestinians, UNRWA.

Like the EU Commission, Development Minister Svenja Schulze said in a statement that Germany took great care that its aid for Palestinians “serves peace and not the terrorists.”

“But these attacks on Israel are a terrible watershed, so we will review our whole commitment to the Palestinian areas,” she added.

Schulze said that Germany wants above all to discuss with Israel “how we can best serve peace in the region and security for Israel with our development projects.” She noted that Israel also has an interest in Palestinians being able to live in long-term stability, and said Germany will also coordinate with its international partners.

Germany is not suspending the humanitarian aid it provides separately via international NGOs and the U.N., the Foreign Ministry said. Ministry spokesperson Christian Wagner said Monday that much of the 72 million euros pledged this year has been paid out, and payments will continue because they support “life-saving work.”

Austrian Foreign Minister Alexander Schallenberg told Oe1 radio on Monday that all development aid payments will be “put on ice for now.” He put the funds affected at about 19 million euros.

He said that Austria will review all projects with the Palestinian areas and consult with its international partners on further steps

Samuel Petrequin in Brussels and Geir Moulson in Berlin contributed