A recent European financial investment in the West Bank may threaten Israeli efforts to see the Palestinian Authority abandon its pay-for-slay policy, even if the money has bypassed the PA, an expert told The Jerusalem Post on Thursday.
The European Investment Bank and the European Commission announced earlier this week that the Palestinian economy received a €395 million injection to support Palestinian micro, small, and medium-sized enterprises.
The funds will bypass the PA and be channeled directly through the Bank of Palestine, the National Bank, Quds Bank, Cairo Amman Bank, and Palestine Investment Bank to “expand access to credit through local financial intermediaries,” the EIB confirmed.
As noted by Itamar Marcus, the founder and director of Palestinian Media Watch, and exclusively reported on by the Post in February, the Bank of Palestine, one of the banks participating in the program, has explicitly refused requests from the Finance Ministry to close 3,400 accounts reportedly used to distribute payments to released terrorists.
“Banks that are receiving the money directly from the EU have the bank accounts paying terror salaries to terrorists and their families,” Marcus commented. “As long as the EU continues injecting money to strengthen the economy that enables the PA to limp along, without first seeing fundamental reforms throughout Palestinian society, it is responsible for Palestinian youth being brought up to believe that violence and terror will ultimately destroy Israel. Conflict and terror will continue for another generation, courtesy of the EU.”
Funds intended to expand access to financing for Palestinian businesses
The package also includes the deployment of the remaining €2.1 million in technical assistance under a total €3.5 million envelope, of which €1.4 million has already been deployed.
EIB said the funds would “expand access to affordable financing for Palestinian businesses.”
“Palestinian businesses need reliable access to finance if they are to continue operating, investing and protecting livelihoods under extremely difficult conditions,” said EIB Vice-President Gelsomina Vigliotti.
“With these agreements, we are putting into operation the €400 million facility announced in October 2025 and making available up to $395 million through local partner banks to support Palestinian MSMEs where financing is most needed. At the same time, €3.5 million in technical assistance will help reinforce the sector at multiple levels.”
The Palestinian economy has struggled for years, with conditions worsening after Hamas's October 7 attack prompted Israel to revoke the work permits of roughly 100,000 Palestinians on national security grounds. Economic pressures had already been in place after Israel, in 2022, legislated the withholding of Palestinian Authority funds in response to the authority's payments to convicted terrorists and the families of slain attackers under its pay-for-slay program.
Palestine Monetary Authority Deputy Governor Mohammad Manasrah said, “The implementation of this $395 million package marks a concrete step in reinforcing the Palestinian financial sector's ability to support businesses during a period of exceptional strain. Through five sub loans to local banks, part of which is structured as sub-debt to strengthen banks' capital base, while the use of proceeds remains exclusively directed toward financing micro, small and medium-sized enterprises, this cooperation will broaden access to financing across Palestine, enabling businesses to continue operating, adapt to difficult conditions and sustain economic activity.”
Despite positive steps, terror glorification permeates PA society
Though Marcus said it was a positive step that the EU had “attempted to bypass the terror-supporting Palestinian Authority” to provide direct help to small businesses, he told the Post that “terror support and terror glorification permeate every aspect of Palestinian society so that whenever money is pumped into Palestinian society it is supporting the terror environment.”
The EIB operation forms part of the European Commission’s “Multiannual and Comprehensive Program for Palestinian Recovery and Resilience,” which has a budget of up to €1.6 billion for 2025 to 2027, and includes a €620 million grant specifically for the PA.
Though the EU has prohibited the use of its funds for pay-for-slay payments, critics have noted that the EU funds have allowed the PA the financial leeway to invest in the salaries of terrorists.
Marcus voiced fears about the types of protocols in place, ensuring that only businesses not participating in the glorification of terrorism receive the funds.
“For example, clothing factories and stores are producing and selling the shirts for children that have pictures of terrorists, teaching them that murderers of Israelis are their heroes and role models. Other factories and stores produce and disseminate the maps of ‘Palestine’ that erase and replace Israel. Sporting goods are sold to teams that are named after terrorists,” he explained.