Palestine Monetary Authority
Palestine Monetary Authority, pma.ps

POLITICISING PEGASE

Politicising the EU Pegase Direct Financial Support Programme to structurally address the Palestinian fiscal unsustainability

June 2020

by Alesandro Ferrante

A significant part of the EU’s fiscal assistance to the Palestinian Authority is channelled through the PEGASE Direct Financial Support Programme. This instrument has nevertheless failed to address the structural drivers of the PA’s unsustainable fiscal position. Fiscal losses as well as the regressive issues featuring in the Palestinian tax structure are largely ignored by the highly technocratic approach expressed in the latest PDFS action plan. Given the increasingly worrying fiscal situation of the PA in a context of growing donor fatigue, this report proposes to urgently revise the PDFS approach and to intensify the political content of this development program.
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