EU Backtracks Decision to Suspend Palestinian Financial Aid Over Hamas Attack

The European Commission made the statement just hours after its commissioner announced that the bloc would suspend ‘all payments’ to Palestinians.

Palestinians search for survivors after an Israeli airstrike on buildings in the refugee camp of Jabalia in the Gaza Strip on Oct. 9, 2023. Mahmud Hams/AFP via Getty Images

The European Union (EU) said on Oct. 9 that it would maintain its financial assistance to Palestinians, backtracking its previous decision to suspend all payments following Hamas’ terror attack on Israel.

This came just hours after EU Commissioner Oliver Varhelyi said that the commission was conducting a “comprehensive assessment” of its full development portfolio, totaling 691 million euros ($731 million).

Mr. Varhelyi said that “all payments” to the Palestinians would be immediately suspended, and all new project proposals would be postponed until further notice.

“The foundations for peace, tolerance and co-existence must now be addressed,” he stated on social media. “We need action and we need it now.”

Later on, the European Commission said there would be no suspension of payments to the Palestinians. It claimed that there were no payments foreseen but did not elaborate on the reason behind this reversal.

The commission also initiated “an urgent review” of the EU’s assistance to Palestinians to ensure that “no EU funding indirectly enables any terrorist organization to carry out attacks against Israel.”

“The commission will equally review if, in light of the changed circumstances on the ground, its support programs to the Palestinian population and to the Palestinian Authority need to be adjusted,” it said in a statement on Oct. 10.

European Commissioner for Crisis Management Janez Lenarcic stated on X that the humanitarian aid to Palestinians “will continue as long as needed.” He condemned Hamas’ assault as a “terrorist attack.”

Payment Suspension Will Damage EU Interests

Josep Borrell, high representative of the European Union for foreign affairs and security policy, speaks to the media in Berlin on Aug. 26, 2020. Sean Gallup/Getty Images

EU Foreign Policy Chief Josep Borrell also took to X to oppose the suspension of EU assistance to Palestinians, saying that such a move would have been detrimental to the bloc’s interests in the region.

“The suspension of the payments—punishing all the Palestinian people—would have damaged the EU interests in the region and would have only further emboldened terrorists,” he stated on X.

The EU says it’s 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.

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

Israel declared a state of war after Hamas launched a wave of attacks against its civilians and properties, prompting Israeli forces to launch retaliatory strikes on Gaza, the stronghold of Hamas. The death toll on both sides has passed 1,100, with thousands more injured.

During an earlier briefing on Oct. 9, the commission sought to draw a clear line between Hamas, which it considers a terrorist group, and the Palestinians, who are in need of humanitarian aid. The commission said that humanitarian aid wouldn’t be affected by the review.

Israeli fire brigade teams douse the blaze in a parking lot outside a residential building following a rocket attack from the Gaza Strip in the southern Israeli city of Ashkelon, on Oct. 7, 2023. Ahmad Gharabli/AFP via Getty Images

Leaders of the United States, France, Germany, United Kingdom, and Italy have announced unequivocal support for Israel, while asserting that Hamas—which means the Islamic Resistance Movement in Arabic—does not represent the interests of the Palestinian people or all of Palestine.

“All of us recognize the legitimate aspirations of the Palestinian people, and support equal measures of justice and freedom for Israelis and Palestinians alike,” they said in a joint statement on Oct. 9.

“But make no mistake: Hamas does not represent those aspirations, and it offers nothing for the Palestinian people other than more terror and bloodshed,” they added.

The United States, France, Germany, United Kingdom, and Italy said they are all committed to supporting Israel in its efforts to defend itself and its people “against such atrocities.”

Stephen Katte and The Associated Press contributed to this report.