EU to pay UN Palestinian agency 50 million euros but hold back some funds

Residents inspect damages caused to Zeitoun neighborhood, in Gaza City

By Gabriela Baczynska and Andrew Gray

BRUSSELS (Reuters) -The European Commission will pay 50 million euros ($54 million) to beleaguered U.N. Palestinian refugee agency (UNRWA) but hold back 32 million euros while it deals with Israeli allegations that 12 staff took part in the Oct. 7 attacks on Israel.

In an announcement on Friday, the European Union's executive body also said it would increase overall aid to Palestinians by 68 million euros this year to help civilians facing "terrible conditions" in the Israel-Hamas war in Gaza.

UNRWA provides aid and basic services in the Gaza Strip and elsewhere in the Middle East. It was thrown into crisis after Israel alleged in January that 12 of its 13,000 staff in the enclave were involved in the attack by Palestinian militant group Hamas, during which fighters killed 1,200 people and captured more than 250 hostages, according to Israeli tallies.

UNRWA dismissed all the accused staff. But it warned its operations would be "severely compromised" after many major donors, including the United States, Britain and several European Union countries, suspended payments or said they would not approve new funding until the matter was resolved.

The European Commission, one of UNRWA's biggest donors, had been due to pay 82 million euros around now to the agency.

But, seeking to balance different views among EU countries and in its own ranks, the Commission said it would pay 60% now and the rest in two installments of 16 million euros each as UNRWA addressed issues arising from the allegations.

"The 1st transfer is already an important step to alleviate the situation in Gaza," EU foreign policy chief Josep Borrell said on social media platform X.

"By continuing to fund it, the EU acknowledges UNRWA as an irreplaceable actor."

UNRWA's boss, Philippe Lazzarini, said the Commission's decision will support the agency in delivering "lifesaving and essential services" to Palestinian refugees. But he added that UNRWA needed all 82 million euros as soon as possible.

"The full disbursement of the EU contribution is key to the agency's ability to maintain its operations in a very volatile area," he said.

As well as dismissing the accused staff, the United Nations is investigating the allegations and has also commissioned a review of UNRWA's adherence to neutrality.


Israel responded to the Hamas attack with a military assault on Gaza that has killed more than 30,000 Palestinians, according to the Hamas-run health ministry, as well as leaving many hungry and homeless.

"We stand by the Palestinian people in Gaza and elsewhere in the region. Innocent Palestinians should not have to pay the price for the crimes of terrorist group Hamas," European Commission President Ursula von der Leyen said.

"They face terrible conditions putting their lives at risk because of lack of access to sufficient food and other basic needs."

UNRWA has agreed it "stands ready to ensure that a review of its staff is carried out to confirm they did not participate in the attacks and that further controls are put in place to mitigate such risks in the future," the Commission said.

It said the agency also agreed to an audit into its control systems "to prevent the possible involvement of its staff and assets in terrorist activities" and to strengthen its department of internal investigations.

The further tranches of aid would be "released in line with the implementation of this agreement", the Commission said.

($1 = 0.9223 euros)

(Reporting by Gabriela Baczynska and Andrew Gray; editing by Angus MacSwan and Rosalba O'Brien)