(SO8) The fiscal sustainability of the Palestinian Authority is strengthened to support sustainable provision of essential public services.

A targeted contribution to the fiscal sustainability of the Palestinian Authority will be made through the EU PEGASE Direct Financial Support mechanism, notably via its hospital debt relief window. This window focuses on the settlement of accumulated arrears related to medical referrals issued by the Palestinian Ministry of Health to private hospitals in the West Bank, which represent a major source of PA debt towards the private sector and have contributed to severe cash‑flow constraints in the health system. By alleviating these arrears, PEGASE supports the financial viability of an integral component of the Palestinian health system, ensures continued access to life‑saving specialized healthcare services, and reduces fiscal pressure on the PA. The support is implemented under robust EU financial control, audit and verification procedures.