Europe Loudly Says “Palestinian State.” Under its Breath: “Not Really.”

Part 5 of the 'Quiet Abandonment' series on the world's retreat from the Palestinian cause. America created the illusion, Europe echoes it.

While American leaders remain trapped by institutional investments in the Oslo framework, European leaders find themselves caught in a different but equally constraining dynamic: a moral trap that forces them to signal support for Palestinian aspirations while protecting economic interests and avoiding the uncomfortable implications of genuine Palestinian sovereignty.

Funding the Illusion

Since 2017, the European Council on Foreign Relations has noted that the Oslo Accords, intended as a five-year transition to Palestinian sovereignty, have instead hardened into a framework that stabilizes the so-called “occupation” and gives all parties vested interests in keeping the status quo.

As the Palestinian Authority's (PA) largest donor, the EU committed to a €1.6 billion aid package in April, tying the funds to PA reforms. In the past, insistence that textbooks remove antisemitic content and incitement to violence resulted in a 2021 freeze; it was brief, however, and the Council failed to ratify it. Last month, the EU approved a resolution to freeze aid if textbook reforms are not carried out. Will it be carried out this time?

If not, the EU will continue to maintain the status quo while pretending to support statehood.

Palestinian leaders argue that linking EU funding to reforms undermines their sovereignty aspirations and criminalizes legitimate political struggle. This underscores the disconnect between European rhetoric and Palestinian realities.

Until now, the aid structure has kept the PA afloat as a non-sovereign political unit, forestalling its collapse and avoiding the real political costs of demanding a genuine peace plan. This funding structure creates perverse incentives: the PA itself becomes more invested in maintaining the status quo that provides its funding than in achieving the sovereignty that would eliminate its excuse for European support and the EU and member states are aware of that.

European policymakers, such as EU foreign policy chief Josep Borrell, argue that such funding and diplomatic engagement are essential for keeping the peace process alive and preserving the possibility of future negotiations. However, the “incremental steps” have become a substitute for genuine strategy. The result is a decades-long holding pattern that offers neither sovereignty for Palestinians nor security for Israelis.

The recent Saudi-French three-day conference at the UN perfectly exemplified this dynamic on the world stage. The most notable feature of this impressive international performance was what it didn't produce: concrete steps toward actual sovereignty or any meaningful challenge to the structures that prevent Palestinian statehood.

The Pattern of Performative Recognition

European gestures follow a predictable pattern: dramatic announcements, Israeli diplomatic protests, then return to business as usual. First Sweden in 2014, followed by the May 2024 announcement that Ireland, Norway and Spain formally recognized a Palestinian state based on pre-1967 armistice lines. Irish Prime Minister Simon Harris said:

This decision of Ireland is about keeping hope alive. It is about believing that a two-state solution is the only way for Israel and Palestine to live side by side in peace and security.

Israel recalled its ambassadors in both cases, and in Ireland, the embassy was even closed.

Such recognition fails to produce tangible change. The settlement project, widely condemned in Europe as the main obstacle to peace, continues unabated, and Judea and Samaria remain home to 500,000 Jews. There has been no serious challenge to this even after France, the UK, and Canada recently announced their recognition of “Palestine.”

Former EU Middle East envoy Susanna Terstal admitted that, while “the two-state-solution remains the only viable option , . . . it’s getting harder and harder with the passing of time.” Analysts at Israel’s Institute for National Security Studies (INSS) have likewise noted that,

While such recognition can yield domestic and international political benefits, it is largely symbolic for Palestinians and leave realities on the ground unchanged. This cacophony demonstrates again that Europe agrees on the concept of two states for two peoples, but remains divided on how and when to pursue this goal. [Or if.]

Meanwhile, the EU condemns settlements and the Gaza war but maintains vigorous trade with Israel. In 2024, this equalled €42.6 billion, constituting one-third of Israel’s global trade volume; EU exports to Israel even increased during 2023. Thus the EU, in effect, enables the status quo and signals moral concern without disrupting economic relationships.

The Limits of European Agency

European leaders find themselves constrained not only by their interests but by their position within the broader international system. Unlike the United States, which can shape Middle East dynamics through military aid, alliance relationships, and regional presence, European countries lack the leverage to make their recognitions of Palestinian sovereignty meaningful. This limitation renders European gestures particularly hollow, serving primarily as moral positioning rather than practical policy.

Why European Countries Don't Actually Want a Palestinian State

Beyond the moral performance lies a deeper reality: European countries have substantial reasons to genuinely NOT want a Palestinian state, as it would threaten their interests across multiple dimensions.

European leaders fear that a Palestinian state could fall under Hamas or Iranian influence since Palestinian polling shows support for armed groups operating independently of the PA, including 68% favoring their formation and 87% rejecting the PA’s right to arrest their members. This would destabilise the region and increase terrorism risks.

A European Parliament study found that terrorism has cost Europe €185 billion in lost GDP and around €5.6 billion in lost lives, injuries, and damage to infrastructure since 2004. The economic vulnerability to spillover threats to investments, tourism, and public trust helps explain European hesitation to back a Palestinian state.

European governments fear a Hamas-led state that would likely intensify conflict with Israel, and destabilize allies like Jordan and Lebanon, unleashing a refugee wave comparable to Syria or Ukraine. With asylum systems already overwhelmed and anti-migrant parties gaining ground, the political cost would be immediate.

European leaders and policymakers recognize that an unstable Palestinian state could threaten the €40–45 billion trade relationship with Israel. This includes robust flows in high-tech goods and investment into Israel’s innovation economy. Moreover, the Leviathan and Tamar gas fields, critical to Eastern Mediterranean energy diversification, remain vulnerable to conflict-driven disruptions.

Since 2015, the International Criminal Court has claimed jurisdiction over Gaza, the West Bank, and East Jerusalem, putting EU member states’ arms sales at risk of scrutiny. The establishment of a Palestinian state could heighten political pressure on the ICC to pursue that scrutiny.

The EU's 27 member states remain divided on Palestinian statehood. A minority of members recognize Palestine; the largest states prioritize Israel’s security. This blocks unified action.

These divisions are reinforced by domestic political calculations. After the success of the far-right AfD in state elections in 2024, for example, Chancellor Scholz announced that Germany “will not recognize a Palestinian state in the short term.” The timing hints at political caution in an effort to contain voter backlash amid rising nationalism and anti-migrant sentiment. Hungary’s temporary veto of sanctions against Israeli settlers — like its stalling of Ukraine aid—highlights how unilateral moves toward state recognition can fracture EU unity when national interests override collective policy.

Pushing for a Palestinian state risks straining EU-U.S. relations, as the U.S. rejects unilateral recognition, with Trump in 2025 dismissing European moves as "rewarding Hamas". This threatens NATO cooperation (€400 billion budget) and Europe's Middle East influence at a time of the developing China-Russia axis with European security depending on transatlantic coordination.

The Institutionalization of Performance

European funding for Palestinian civil society, support for UN agencies serving Palestinians, and regular diplomatic statements about settlement expansion all serve similar functions: they demonstrate European concern for Palestinian welfare while avoiding any challenge to the fundamental structures that prevent Palestinian sovereignty.

In other words, European gestures of support for Palestinian statehood are less about diplomacy than domestic considerations. Recent polling and street mobilization make the political calculus obvious. In mid-2025, net favourability towards Israel hit new lows across Western Europe, and in the UK almost half of voters (45%) said the government should recognize Palestine, with only 14% opposed. News outlets also chronicled months of large demonstrations in Berlin, Paris, and London that put mainstream parties under pressure to “do something,” even if only symbolically.

Recognition efforts and anti-Israel rhetoric serve as pressure valves, allowing governments to perform solidarity to satisfy domestic constituencies that support Palestinian rights while maintaining the status quo and economic relationships with all parties.

Beyond these immediate concerns, a Palestinian state risks undermining Europe's diplomatic credibility, as €10 billion in PA aid since 1993 would be seen as wasted if the state fails. European Middle East influence might cede to China or Russia, as seen in recent Saudi-Iran mediation talks.

The conference format is particularly useful because it creates the appearance of multilateral action while ensuring that no single European country bears responsibility for concrete outcomes. European leaders can point to such initiatives as evidence of their engagement with Palestinian rights, while ensuring that the engagement remains safely within the bounds of diplomatic theater.

The Abraham Accords, which generated $10 billion in UAE-Israel trade by 2023, bypassed Palestinians entirely and demonstrated that regional normalization could proceed without their consent or participation. Europe's reluctance to embrace this normalisation-first approach, despite its proven economic benefits, reflects a preference for posturing over confronting the reality of Palestinian irrelevance in regional developments.

The International Crisis Group, after describing the failures of policies tying funds to PA reform and trade with Israel to settlement changes, proposed that Europeans “start a debate” on alternatives to Oslo, while keeping the two-state objective. In other words, more talk.

The Performance Continues

Just one month after October 7^th(!), Borrell declared that "the best guarantee for Israel's security is the creation of a Palestinian state." The promise gave the appearance of moral clarity with the usual lack of follow-through. European leaders have discovered that the appearance of supporting Palestinian rights serves their interests better, and at less risk, than actually achieving Palestinian sovereignty.

The three-day Saudi-French conference, then, became a perfect metaphor for Europe's entire approach: sophisticated diplomatic engagement that creates the impression of progress while ensuring that fundamental relationships remain unchanged: The show goes on, providing moral cover for the very “occupation” European leaders claim to oppose.

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NEXT: Palestinian Voices about a Palestinian state

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