European Union reverse earlier announcement by commissioner that it was suspending aid for Palestinian authorities

The European Union late on Monday reversed an earlier announcement by an EU commissioner that the bloc was “immediately” suspending aid for Palestinian authorities.

Instead it said it would urgently review such assistance in the wake of the attacks on Israel by Hamas.

“There will be no suspension of payments” at the moment, a European Commission statement said late on Monday, five hours after EU commissioner Oliver Varhelyi had said that all payments from the development programme for Palestinians would be “immediately suspended. All projects put under review. All new budget proposals … postponed until further notice”.

No immediate explanation for the reversal was given.

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Earlier, the Irish Government said it would challenge the surprise announcement by Hungary’s European Commissioner that all payments of aid to the Palestinian territories would be “immediately suspended” as a result of the Hamas attacks on Israel.

Diplomats were blindsided by declaration by the Commissioner for Neighbourhood and Enlargement Oliver Varhelyi, which was published on social media site X without an official statement from the European Commission’s central communication services.

The announcement came a day before Tánaiste Micheál Martin was to join other EU foreign affairs ministers to discuss the issue at an emergency meeting in response to the conflict, and sent ambassadors scrambling to establish whether Mr Varhelyi had the legal power to unilaterally cut off the Palestinians’ single biggest source of aid before their decision was made.

“We have seen the tweet issued earlier this afternoon by Commissioner Varhelyi, announcing the immediate suspension of the European Commission’s development funding to the Palestinians,” a spokesman for the Department of Foreign Affairs said.

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“Our understanding is that there is no legal basis for a unilateral decision of this kind by an individual Commissioner and we do not support a suspension of aid.”

The Department confirmed it is to make a formal request to the Commission to clarify the legal basis for this announcement.

The series of messages by Mr Varhelyi announced that the Hamas attacks on Israel were a “turning point” and that “all payments” would now be “immediately suspended”.

“As the biggest donor of the Palestinians, the European Commission is putting its full development portfolio under review, worth a total of EUR 691 million,” Mr Varhelyi wrote.

The announcement caused shock among NGOs that work in the region, to which the EU and its member states are major donors, and raised fears of compounding a humanitarian crisis as Israel declared a “complete siege” on Gaza that would cut off electricity, food, water, and gas.

The decision also drew criticism from Luxembourg, Belgium, and Spain, while the European Commission was pummelled by questions from journalists about why its policy appeared to have suddenly shifted and whether humanitarian aid was included in the freeze.

In a hasty clarification also posted on X, the EU’s crisis management commissioner Janez Lenarčič announced that EU humanitarian aid to Palestinians “will continue as long as needed” and that it was “imperative to protect civilians” even while condemning Hamas.

Austria and Germany have already announced they would suspend payments of bilateral aid to Palestinians amid revulsion at the attack, which killed 800 people including 260 revellers at a rave party, leading to pressure on the European Commission to follow suit.

Four out of five Palestinians are dependent on international assistance for basic human needs, and the Department of Foreign Affairs has said it remains committed to delivering support to Palestinian civilians that their needs should be a central part of the overall response to this crisis by the international community.

Irish funding provides emergency humanitarian assistance to the most vulnerable, while also supporting the Palestinian Authority to deliver basic public services.

Mr Varhelyi, an appointment by the hardline government of Viktor Orban, previously obstructed the payment of education funding for the Palestinian territories due to a row about textbooks that were claimed to have extremist content.

Ireland and other EU member states ultimately resorted to publicly demanding the release of the money last year, saying the Commission had no mandate to withhold it.

In a statement released over five hours after Mr Varhelyi’s announcement, the European Commission said it would undertake an “urgent review” of all EU assistance for Palestine to ensure “no EU funding indirectly enables any terrorist organisation to carry out attacks against Israel”.

In the meantime no payments would be suspended, it added, because no payments had been scheduled to be made.