The European Union announced a review of its development aid to the West Bank and Gaza Strip immediately after Hamasterrorists attacked Israel on October 7. After a European Commission meeting in Strasbourg, a decision has now been reached to continue providing development aid. There are no  indications that Hamas — deemed a terrorist organization by the EU, the US and others — misappropriated EU funds.

European Commissioner for Neighborhood and Enlargement Oliver Varhelyi said that the audit of this year's payments had not revealed a misuse of funds and that the EU could continue cooperating with various agencies and authorities in the Palestinian territories.

After the October 7 attack by Hamas on Israel, Varhelyi had initially wanted to stop all payments. This, however, had angered the EU's chief diplomat Josep Borrell. Consequently, an agreement was reached to audit previous payments.

Since then, 119 development aid contracts worth €330 million ($358 million) have been reviewed.  Non-governmental organizations have been requested to answers additional question with regard to 51 of these contracts. The European Commission has said that seven contracts regarding infrastructure in the Gaza Strip have been suspended due to the ongoing conflict. The EU had earmarked a total of €1.2 billion ($1.3 billion) in development aid for the Palestinian territories for the period 2020 to 2024.

Germany to keep providing aid

The German government had also said that it would review its development aid to the Palestinian territories. On the sidelines of a meeting of foreign affairs and development ministers in Brussels, Germany's state secretary in the Federal Ministry for Economic Cooperation and Development Jochen Flasbarth said that the government had so far audited development projects in Gaza and Jordan. He added that Germany would continue its cooperation with the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).

"The review of other areas is still ongoing, but should be completed soon," Flasbarth said in reference to the West Bank, which is occupied by Israel and governed by the Palestinian Authority.

It was right to carefully vet all funding programs in light of the serious situation, Flasbarth added. "We have found nothing unusual and have heard from other states that have chosen a similar path that they have also carried out checks and found everything to be above board."

Stricter funding checks proposed

Varhelyi wants to make future development aid conditional on tougher checks. Going forward, there will be checks to see whether aid organizations have made "inflammatory" or antisemitic remarks. There are also plans to check whether families seeking EU welfare payouts for example have engaged in hate speech. So far, this rule only applied to the head of the families in need.

But not everyone agrees with these stricter rules. Some European commissioners at the meeting in Strasbourg said they considered the restrictions exaggerated and unjustified.

Some of the EU funds go towards paying the salaries of Palestinian Authority officials in the West Bank. They also indirectly provide social aid to Gazan families via aid organizations. The EU severed all direct contact with Hamas in 2007.

Al-Haq, a Palestinian human rights organization, with which the German Ministry for Economic Cooperation and Development and the Protestant aid agency Brot für die Welt (Bread for the World) used to cooperate, will no longer receive funds. A spokesperson for the ministry recently said that organizations that supported armed resistance to Israel were not appropriate partners. 

Direct humanitarian aid remains unaffected

Direct humanitarian aid provided to the Palestinians in the form of food, shelter and medical care, which is distinct from development projects, remains unaffected and the EU is planning to extend this. After the start of Israel's offensive against Hamas in the Gaza Strip, European Commission President Ursula von der Leyen announced the bloc would quadruple aid to €100 million ($108 million).

EU member states have granted a further €260 million in urgently needed humanitarian assistance, of which €160 million will be paid for by Germany, according to German Foreign Minister Annalena Baerbock.

The bloc will also continue to provide funding to the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) , which has been operating in the region for decades and supporting people in the Palestinian territories, Jordan, Lebanon and Syria. Two thirds of Gazan were already dependent on UNRWA assistance even before the current war between the Israeli army and Hamas erupted. The UN agency has 13,000 employees in Gaza.

Last year, UNRWA's largest donors were the US, which supplied $343 million (€315 million), followed by Germany with $202 million (€185 million) and the EU with $114 million (€105 million). The UNRWA budget totaled $1.17 billion (€1 billion) in 2022.

Meanwhile, Belgian Minister of Development Cooperation Caroline Gennez has called for fighting to stop in Gaza, saying that short pauses as proposed by the EU in October are not adequate. "I think it is very clear that the violence should end now," she said. "There have been too many innocent victims in Gaza and still too many Israeli hostages taken. It is important that the violence stops and humanitarian aid is secured and that one day we start negotiations for a durable tenable two-state-solution."

France, too, has called for an end to the hostilities.

This article was translated from German.