EU unlocks €50 million for UNRWA but demands reviews to release more funding

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The EU on Friday said it would transfer €50 million to the UN agency for Palestinian refugees and possibly unlock more funds planned this year, depending on how the agency addresses its requests for extra scrutiny.

The move was welcomed by UNRWA’s commissioner general Philippe Lazzarini, who said it came at a “critical time.”

The funds “will support the agency’s efforts to maintain life-saving and essential services for Palestine refugees across the region,” he said on social media platform X.

Mr Lazzarini also warned that “the full disbursement of the EU contribution is key to the agency’s ability to maintain its operations in a very volatile area”.

The agency has said that it may have to suspend its operations across the region in the coming weeks.

It remains imperilled by funding freezes after Israel accused 12 of its staff members of involvement in the October 7 attacks.

Unlike many other large donors, the EU Commission did not suspend its transfers but made three additional requests on January 29.

They include an audit by EU-appointed experts, a review of the agency's 13,000 employees in Gaza and the strengthening of its department of internal investigations.

At the time, the EU was vague about the timetable of disbursements. Before the Israeli accusations were made public, the bloc had planned to transfer €82 million in late February.

“On the brink”

Speaking on Thursday, Farhan Haq, deputy spokesman for the UN Secretary General, told The National that: “We’re essentially on the brink of UNRWA not being able to provide services but, as of right now, it is continuing to provide services.”

The latest available ranking of pledges on the agency's website show that in 2022, the EU was the third biggest donor with close to $115 million.

At $343 million, the US was the agency's most important donor, followed by Germany, at $202 million.

Both have frozen their funds to the UNRWA over the Israeli accusations.

The announcement was viewed by some as an attempt to strike a balancing act by, on the one hand, supporting Palestinians and, on the other, imposing restrictions on its aid.

Centrist Danish MEP Karen Melchior told The National that it was “a sort of victory because UNRWA will get the majority of the funds that have been promised”.

“But it risks undermining the functioning of agency, which is tasked to conduct multiple investigations while doing its usual job in a war zone with less money,” she said.

“By not thinking about what we’re asking them to do and what is actually possible, we risk creating a situation that will lead to the collapse of UNRWA,” she said.

The EU commissioner in charge of development aid, Oliver Varhelyi, said the commission was “diversifying its assistance for the innocent Palestinian people in Gaza”.

“At the same time, the commitment of UNRWA to introduce robust measures to prevent possible misconduct and minimise risk of allegations is welcome,” said Mr Varhelyi.

The €50 million is expected to be used by the agency to pay salaries of its staff across the region, including teachers and health workers.

The remaining planned €32 million will be disbursed in two parts “in line with the implementation of this agreement”, said the EU Commission.

The EU Commission added that “the agreement with UNWRA foresees the possibility for the commission to suspend or recover payments should credible information indicating significant deficiencies in the functioning of the internal control system come to light”.

The EU Commission also said it would allocate an extra €68 million “to support the Palestinian population across the region, to be implemented through international partners like the Red Cross and the Red Crescent”.

“Innocent Palestinians should not have to pay the price for the crimes of terrorist group Hamas,” said the commission's President Ursula von der Leyen.

“They face terrible conditions putting their lives at risk because of lack of access to sufficient food and other basic needs. That is why we are reinforcing our support to them this year by a further €68 million.”

A “positive development”

Spokesman Eric Mamer said that this extra funding did not exclude any agencies, including the UNRWA.

“Circumstances will determine what are the best organisations to work with in order for us to implement this support,” said Mr Mamer at a press briefing.

The EU additionally pledged €125 million in humanitarian aid in 2024 for Palestinians in occupied territories, including Gaza, and said it would send the first €16 million on Friday. It did not specify which organisation would be the recipient of those funds.

Commissioner Janez Lenarcic, in charge of humanitarian aid, said the funds would go to “food, medical and non-food items, shelter, as well as education and psycho-social support to civilians in Gaza”.

“It is essential to also ensure the safe and unimpeded access for humanitarian aid and workers into and throughout Gaza. Thousands of lives are at stake,” he said.

Martin Konecny, director of Brussels-based think tank, the European Middle East Project, said the EU announcements were positive.

“In context, where multiple governments recklessly cut their UNRWA funds, the EC move is, on balance, a positive development,” he said on X.

“It disburses 60 per cent of the money, commits to pay the rest in near future plus adds separate emergency funding (some of which will also go via UNRWA).”

At stake lies the UNRWA's ability to operate in Gaza and in the wider region at a time of heightened instability.

Reports have emerged of children dying from malnutrition in the north of the enclave, and at least 100 Palestinians were killed and about 700 wounded when Israeli forces opened fire on crowds gathering around aid lorries on Thursday.

Speaking before the EU Commission's Friday announcement, Marta Lorenzo, the UNRWA's representative to the EU, warned that the agency might enter a negative cash flow soon, which would impede its ability to pay salaries to its 30,000 staff across the region.

“It would be very difficult for UNRWA to decide what to cut first. Do I cut education in Jordan? Or do I cut it in Lebanon? Do I stop giving shelter or do I stop giving food? This is a scenario where none of us wants to be. Taking this decision is a very tough one and not a fair one,” Ms Lorenzo told The National.

Also speaking ahead of the announcement, centrist Irish MEP Barry Andrews warned against “burying UNRWA under an avalanche of bureaucracy”.

Mr Andrews pointed to the fact that so far, no donor had stated having received proof of the Israeli allegations.

“In the EU, we normally try to adhere to evidence-based policy,” he said. “But on this occasion it feels like we are pursuing policy on a political and ideological position.”

In mid-January, the agency had announced the launch of an independent review of claims against its neutrality, headed by former French Foreign Minister Catherine Colonna.

Following the later Israeli accusations regarding the October 7 attacks, which killed about 1,200 people, the UN’s Office of Internal Oversight Services (OIOS) was mandated to investigate the claims.

A representative for the UN chief said on Thursday that they had yet to receive Israeli evidence to back their claims.

The UNRWA also fired the member of staff at the centre of the Israeli accusations. Two are dead.

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