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UNRWA chief says cash flow crisis may force him into 'unprecedented decision'

Published by Global Banking & Finance Review

Posted on June 24, 2025

2 min read

· Last updated: January 23, 2026

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GENEVA (Reuters) -The head of the U.N. Palestinian refugee agency said on Tuesday he may have to take an "unprecedented decision" about the services it provides if funding is not found soon to ease a

UNRWA Chief Warns of Major Service Cuts Without Urgent Funding

GENEVA (Reuters) -The head of the U.N. Palestinian refugee agency said on Tuesday he may have to take an "unprecedented decision" about the services it provides if funding is not found soon to ease a cash flow crisis.

Philippe Lazzarini said the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) faced a $200 million deficit.

"Cash flow is managed on a weekly basis," he told reporters in Berlin. "Without additional funding I will soon have to take an unprecedented decision affecting our services to Palestinian refugees."

Lazzarini gave no further details of what that decision might entail.

The United States was UNRWA's biggest donor but President Donald Trump announced broad cuts in foreign aid, including to UNRWA, earlier this year.

Other Western governments' aid budgets are also under pressure following calls by Trump for more spending on defence as Russia's war in Ukraine drags on.

UNRWA provides aid, health and education services to millions in the Palestinian territories and neighbouring Arab countries of Syria, Lebanon and Jordan.

Lazzarini said that two weeks ago he had been about to suspend 10,000-15,000 UNRWA staff in the region because of the cash flow crisis but an advance contribution from a donor had given the agency respite for the next two months.

"Just to process the payroll of our staff we need $60 million a month. We have no visibility anymore beyond September," he added.

United Nations Secretary-General Antonio Guterres has requested a strategic assessment of the impact of the UNRWA mandate and will propose how the right of Palestinian refugees can be protected, Lazzarini said.

Israel has banned UNRWA from operating on its territory, accusing it of employing members of Palestinian militant group Hamas who took part in the October 2023 attacks on Israel that led to the war in Gaza.

UNRWA said as the ban went into effect this year that operations in the Gaza Strip and West Bank would also suffer.

The U.N. has said it will investigate all accusations made by Israel and asked Israel for evidence, which it says has not been forthcoming. Lazzarini has said that UNRWA has been the target of a disinformation campaign.

(Reporting by Olivia Le Poidevin, Editing by Miranda Murray and Timothy Heritage)

Key Takeaways

  • UNRWA faces a $200 million funding deficit.
  • Service cuts may occur without urgent funding.
  • The U.S. was a major donor but cut aid.
  • 10,000-15,000 staff nearly faced suspension.
  • UNRWA accused of employing Hamas members.

Frequently Asked Questions

What is the current funding deficit faced by UNRWA?
UNRWA is facing a $200 million deficit, which is impacting its ability to provide services.
What might happen if UNRWA does not secure additional funding?
Philippe Lazzarini indicated that he may have to make an unprecedented decision affecting services to Palestinian refugees.
How does the cash flow crisis affect UNRWA staff?
Lazzarini mentioned that he was close to suspending 10,000-15,000 UNRWA staff due to the cash flow crisis.
What has been the response from the U.S. regarding UNRWA funding?
The U.S. was UNRWA's biggest donor, but President Trump announced significant cuts in foreign aid, including to UNRWA.
What services does UNRWA provide?
UNRWA provides aid, health, and education services to millions of Palestinian refugees in the territories and neighboring Arab countries.

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