EU, World Bank funds saved Palestinian Authority from economic collapse, INSS finds

A report by the Institute for National Security Studies (INSS) reveals that Western funding from the European Union and the World Bank has prevented the economic collapse of the Palestinian Authority (PA). This support came as Israeli tax transfers, a key revenue source, declined. Arab states contributed only a small fraction of the necessary aid. The findings highlight the PA's heavy reliance on international donors to maintain basic functions and avoid fiscal crisis. The report underscores the fragile financial state of the PA and the geopolitical implications of its dependence on Western aid.

Global Impact

Economically, the PA's dependence on Western aid creates a vulnerability that could destabilize the region if funding is reduced. Politically, it reinforces the EU and World Bank's leverage over Palestinian governance and peace negotiations.