The European Union reversed its decision to stop funding Palestinians after a Hamas attack.

The unity of the EU regarding the conflict between Israel and Hamas is already beginning to show signs of weakening.

On Monday, EU Commissioner for Enlargement, Olivér Várhelyi, declared that the Commission would reevaluate the allocation of €691 million in aid to the Palestinian Authority, and all payments would be halted immediately. However, after this decision raised concerns within the bloc, the EU’s chief diplomat, Josep Borrell, stated that the Commission would not stop the payments, as punishing all Palestinians would harm EU interests in the region and potentially strengthen terrorist groups.

Prior to the reversal, the Commission was already experiencing public disputes regarding the decision to halt financial assistance to the Palestinian Authority. According to EU diplomats and officials, the EU foreign affairs ministers meeting on Tuesday could potentially result in an internal confrontation due to conflicting views among member countries on the conflict.

According to an anonymous EU official, the Israel-Palestine conflict is a highly contentious topic within the EU. The divisions among European nations regarding this issue date back almost as far as the conflict itself.

The current conflict is centered around the European Union’s distribution of financial assistance to the area.

As the EU foreign ministers get ready to convene on Tuesday, a dispute has arisen over the Commission’s decision to reduce aid to Palestinians.

Várhelyi’s declaration of a pause in funding happened at the same time as Israel’s defense minister ordering a total blockade of Gaza, resulting in the denial of essential resources such as water, food, and energy to over 2 million individuals living in the Hamas-governed region.

After Várhelyi’s statement, the Commission faced difficulty in specifying the aspects of Palestinian assistance that would be reduced. EU Commissioner Janez Lenarčič, in charge of crisis management, expressed condemnation for the Hamas attack and reassured that EU humanitarian aid for struggling Palestinians will persist until it is no longer necessary.

The divisions within the Commission, specifically between Várhelyi (the Hungarian commissioner who had previously blocked the release of funds due to concerns about Palestinian schoolbooks) and Lenarčič (from Slovenia, a traditionally pro-Palestinian EU country), foreshadowed the upcoming discussions among member states on Tuesday.

On Monday evening, the Commission changed its stance on Várhelyi’s statement and released a press release stating that it will be examining the EU’s support for Palestine promptly.

The purpose of this examination is to guarantee that EU funding does not indirectly support terrorist groups in their attacks against Israel. The Commission will also assess if there is a need to modify their aid programs to the Palestinian people and the Palestinian Authority, considering the current situation on the ground.

“The Commission will promptly conduct a review with Member States. In the meantime, since no payments were planned, there will not be any suspension of payments.”

The Foreign Minister of Luxembourg, Jean Asselborn, was the initial high-ranking European representative to openly oppose Várhelyi’s statement. Asselborn stated to media in Luxembourg that the decision on this matter lies with the member countries and that a meeting among the foreign ministers of all 27 EU nations will only take place on Tuesday to discuss it.

As reported by ABC in Spain, unnamed officials stated that Foreign Minister José Manuel Albares had a phone call with the commissioner. During the call, Albares expressed his disagreement with the decision to suspend aid, which was made without the knowledge of the foreign ministers.

During a technical meeting among EU member states on Monday, numerous diplomats raised inquiries regarding the legal justification for Várhelyi’s decision. This aligns with the public questioning done by Asselborn, according to one EU diplomat. The diplomat added that Várhelyi may have been overly eager to take advantage of the current crisis.

Activating the lights

Prior to the announcement of reductions in aid to Palestinians, there was a split within the EU regarding the appropriate course of action for the bloc.

On behalf of the European Union, Borrell released a statement on Sunday strongly denouncing the numerous and indiscriminate attacks carried out by Hamas in Israel.

However, some nations, such as Ireland, Luxembourg, and Denmark, pushed for a mention of de-escalation in the united statement. This was met with resistance from other countries, including Austria, according to three anonymous officials who spoke with POLITICO. Diplomats noted that for the more pro-Israel countries in the bloc, a call for de-escalation could imply equal responsibility for both sides.

Several diplomats noted the contrasting responses from EU institutions this past weekend. While the European Commission’s headquarters, the Berlaymont, displayed the colors of the Israeli flag, the building of the European Council did not, indicating a more nuanced stance from member states.

A different EU diplomat stated that they would not have chosen to display the Israeli flag on the Berlaymont, and found the image surprising due to its sensitivities.

The ongoing disputes between Israel and the Palestinian territories have been a source of contention for the European Union. Despite advocating for a two-state resolution, the EU has faced challenges in reaching a united stance due to differing opinions among its 27 member nations. Certain countries, such as France, the Nordic states, Belgium, and Ireland, have historically taken a stance that is perceived as overly supportive of the Palestinian cause by other countries.

One member state official raised concerns about the Commission’s position. They stated that while they condemn the attack on Israel, they believe that Israel may retaliate in Gaza in the coming week and has already announced a blockade. Therefore, a more detailed statement would have been preferable. The EU official expressed this opinion.

Given the current international focus on Israel, European Union member states will need to carefully navigate the foreign affairs ministers’ meeting. Certain countries want to emphasize to the European Commission the importance of not moving too quickly. At the same time, those advocating for caution are concerned about being labeled as pro-Hamas.

A different EU representative stated that having a foreign policy in the EU’s nearby regions is one thing, but determining if a unified foreign and security policy can be achieved on a global level is another matter.