European Union and the Palestinian Territories

The Interim Association Agreement on Trade and Cooperation
The European Union has always worked with the Palestinian National Authority for the construction of the institutions for a future democratic and independent Palestinian State alongside Israel and its neighbors. These efforts are regularly discussed at the European Union’s Council of Ministers.
The plan of action agreed on with the PNA establishes the daily agenda for the economic and political cooperation with the EU. The Interim Association Agreement on Trade and Cooperation, signed by the PLO on behalf of the PNA, is the legal basis for the EU's relations with the PNA.
The European Commission is the largest donor for financial assistance to the Palestinians.
The Ad Hoc Liaison Committee
The first European assistance for the Palestinians was submitted as part of the United Nations’ regular budget in 1971. It was contributed to the UN Agency in the Near East (UNRWA). Established in 1993, the Ad Hoc Liaison Committee (AHLC) serves as an international mechanism for the contributions made by the donor countries and coordinates assistance to the Palestinians. From 1994 to the present, the European Community has provided more than half a billion euros in support of the Palestinians. The sum was contributed by the European Community and the Member States of the Union.  
The EU has focused on assistance for development since the beginning of the second Intifada. The sustainability of the Palestinian Authority was put into question by the serious decline of the economic and social conditions due to the second Intifada. For that reason, assistance from the European Community was redirected to PNA’s budget to assist it in the creation of a State. It was also used to boost the economy and to address urgent humanitarian needs.
In 2006 and 2007, most of the European Commission’s contribution was given to the Temporary International Mechanism (Tim) and was used to assist the Palestinian people directly.
Since 2008, the European community’s support to the Palestinian Reform and Development Plan has been distributed through a new financial mechanism calledPEGASE. It replaced the Temporary International Mechanism (TIM).
The European Union-the European Commission and Member States of the Union, through UNRWA, is the largest donor to the Palestinian refugees. A large part of the European Community’s contribution to the Palestinians is currently funded through the European Neighborhood and Partnership Instrument (ENPI).
The European Union’s Executive General Direction for External Relations is responsible for programming the financial
assistance.  This means that it finds priorities and proposes budget amounts for each situation. On the basis of these contributions, the Europe Aid Cooperation Office establishes the financial plans and analizes each project in order to fund them properly. Humanitarian aid is managed by the Commission's Humanitarian Aid Office.
The European Commission’s Technical Assistance Office to the Gaza Strip and the West Bank carries out most of EC’s Assistance Programs for the Palestinians.