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By Andrew Gray
BRUSSELS (Reuters) -The European Union will increase its financial support for the Palestinian Authority with a three-year package worth around 1.6 billion euros ($1.8 billion), the European Commissioner responsible for the Middle East told Reuters in an interview.
Dubravka Suica, the European Commissioner for the Mediterranean, said the financial support would go hand in hand with reforms of the Palestinian Authority, which has been accused by critics of corruption and bad governance.
"We want them to reform themselves because without reforming, they won't be strong enough and credible in order to be an interlocutor, not for only for us, but an interlocutor also for Israel," Suica said.
The commissioner's remarks came ahead of a first "high-level political dialogue" between European Union foreign ministers and senior Palestinian officials including Prime Minister Mohammad Mustafa in Luxembourg on Monday.
The Palestinian Authority welcomed the package of grants and loans, which it said "enhances the ability of national institutions to withstand and provide services, despite the difficult humanitarian conditions and the worsening challenges".
The EU is the biggest donor to the Palestinians and EU officials hope the Palestinian Authority, which runs the West Bank, may also one day take responsibility for Gaza after the war between Israel and Hamas militants comes to an end.
Israeli Prime Minister Benjamin Netanyahu's government, however, has so far rejected the idea of handing over Gaza to the PA and shunned the EU's broader aim of a two-state solution, which would include the establishment of a Palestinian state.
Suica said 620 million euros would go to financial support and reform of the PA, 576 million euros to "resilience and recovery" of the West Bank and Gaza and 400 million euros would come in loans from the European Investment Bank, subject to the approval of its governing body.
She said average EU support for the PA had amounted to about 400 million euros over the past 12 years.
"We are investing now in a credible manner in the Palestinian Authority," Suica said.
(Reporting by Andrew Gray, additional reporting by Ali Sawafta in Ramallah; Editing by Sudip Kar-Gupta and Lincoln Feast.)
