What's actually happening with EU aid for Palestine?

Thankfully, this appeared to be a solo-run by Hungary's EU commissioner Olivér Várhelyí, and EU leadership quickly backtracking, committing instead to a "review" of the EU's funding to Palestine to ensure that no money directly or indirectly funded Hamas, and to assess the 'operational feasibility' of existing projects.

Like a dog chasing its own tail, the European Commission would have to scrutinise whether the European Commission is funding a terrorist organization.

Only in Brussels could this type of bureaucratic spin be effective.

While the commission's public backtracking on Várhelyí's tweets settled some of the drama, the official press release muddied the waters even further, stating that "as there were no payments foreseen, there will be no suspension of payments".

This sentence went largely unnoticed, but led me to eventually discover that the Annual Action Plan for Palestine has not yet been tabled for member states approval in the so-called "NDICI Committee", well behind schedule.

What this means is that the EU's development assistance to Palestine for the year 2024, amounting to €168m, remains de-facto frozen — and has been since before the current escalation of the conflict.

Meanwhile, Várhelyí is advancing an unprecedented €18 million funding plan for Israel entitled "Regional EU-Israel cooperation in support of the Abraham Accords, and fight against antisemitism and fostering Jewish life".

This fund may be needed in the current context, but one has to wonder at the motivation behind pushing ahead with this while the funding for Palestine is on hold and subject to a review.

It has been reported that member states had until Tuesday 14 November to respond to the Israel funding plan.

Under the Neighbourhood Development and International Cooperation Instrument, disbursements of development and other types of financial assistance are contingent on EU member states' approval of annual action plans, which determine how this money must be spent. These plans are prepared by the delegations and headquarters, in the case of Palestine, this would be the Directorate-General for Neighbourhood and Enlargement Negotiation (DG NEAR).

I will not speculate on the reasons behind this delay, but commissioner Várhelyí has a track-record of delaying and suspending aid to Palestine.

Last year, the European Commission withheld a sum of €215m for 13 months based on Israeli intelligence that 6 prominent Palestine based NGOs were using EU money to fund the Popular Front for the Liberation of Palestine. Israel had designated the 6 NGOs as terrorist organisations, receiving sharp criticism from UN human rights experts.

This decision coincided with an attempt to make funding to both the Palestinian Authority and UNRWA conditional on the removal of "anti-Israel" content from schools textbooks.

Funding resumed after the EU's European Anti-Fraud Office (OLAF), found "no suspicions of irregularities and/or fraud" and "did not find sufficient ground to open an investigation".

Afghanistan, Ethiopia, Niger

It is common to hear calls to suspend development aid in response to coups d'état and regimes gone rogue but finding the balance between punishing corrupt regimes and punishing populations is truly delicate.

In its efforts to be a principled actor, the EU has heeded these calls, including by suspending aid to Afghanistan, Ethiopia and, most recently, Niger.

Suspending aid may be an effective form of conditionality in certain instances, but the reality is that most modern conflicts and human rights abuses are highly complex, involving proxies, non-state and terrorist actors, making it difficult to determine who the real 'enemy' is and how best to 'punish' them.

More often than not, these abuses occur in fragile contexts, where there are high levels of aid dependence and where laboratory-like conditions simply don't exist.

It is often the EU's development aid keeping state services up and running. Suspension in these contexts can therefore cause these societies to deteriorate very quickly, and has a disproportionate impact on the most vulnerable.

In the case of Afghanistan, the commission realized that the stakes were too high to fully pull the plug, so the Basic Services Support programme was designed, primarily to pay the salaries of schoolteachers and healthcare workers.

This is why we cannot simply replace development aid with humanitarian aid to Palestine, and why any further delay to publishing the Annual Action Plan would be detrimental.

The EU is the biggest development and humanitarian donor to Palestine. While the EU has committed to quadrupling humanitarian aid, the development aid that is currently under review sustains key social infrastructure in both the West Bank and Gaza, funding civil servants' salaries, access to water and energy. This aid also serves as critical core funding to organizations now on the frontline of the Gaza response, namely, UNRWA.

Without this money, these organizations and the Palestinian Authority itself would struggle to cope, and the chances of the conflict spilling over to the West Bank and beyond would be much higher. This would have catastrophic consequences for all.

In the immediate term, the only thing that the EU can do to prevent further loss of life and suffering is to demand a ceasefire and for Hamas to release hostages.

Nonetheless, I am gravely concerned about the damage that this de-facto suspension could do, both to Palestinians and to the EU.

Clearly, as long as the Annual Action Plan for Palestine is delayed, the EU risks making the current calamitous situation for innocent civilians even worse.

Though the European public is divided on the Palestinian issue, the optics of the EU suspending aid to victims of a conflict are not favourable in any light.

Regardless of your opinions on the conflict, it is in no one's interest for the EU to appear divided or hypocritical.

And then there's the issue of commissioner Várhelyí and the commission as a whole. The failure of the commission to sanction him for this obvious overstep, and the inability of the European Parliament to hold him accountable points to a worrying lack of checks and balances within the EU political system.

The EU needs to find a united voice in response to this crisis. A consistent and principled aid policy would be a good place to start.