It is, even by Brussels standards, an odd decision. The EU is to resume its subventions to the Palestinian Authority (PA)-despite having recently passed a series of laws against financing terrorism, and despite the fact that Hamas, which runs the PA, is on its own list of designated terrorist organisations.

Eurocrats are aware of the awkwardness, and are trying to find a way to stay within the letter of the rules, perhaps by funnelling the donations through NGOs. But it is hard to see how this would work: most of the EU’s money goes on salaries for Palestinian officials, and Hamas has swollen the state payroll with its militants, paying their wages while they serve their sentences in Israeli jails.

Even if a way could be found to circumvent Hamas, the very fact of pumping more money into the Occupied Territories will make terrorism more likely. Palestinians are already, by some measure, the largest per capita recipients of overseas aid in the world. Yet the level of violence in Gaza and the West Bank has risen in proportion to the amount of assistance received.

When Hamas was elected earlier this year, the EU brushed aside American objections and handed over 120 million euros. Palestinians responded by ransacking EU diplomatic missions and kidnapping European citizens. But the EU is less interested in the practical consequences of its subsidies than in the message they send. By firehosing cash at the PA, Europeans signal their opposition to Washington, suck up to their Muslim voters and, above all, vent their dislike of Israel.

The Jewish state represents the supreme vindication of the national principle: that is, the desire of every people to have their own country. For 2,000 years, Jews were stateless and scattered, but they never lost their aspiration for a national home. The EU, by contrast, is founded in the belief that national loyalties are artificial, transient and ultimately discreditable. Simply by existing, Israel challenges the main assumption on which European integration is based.

To be fair, Eurocrats also think they can smother Palestinian terrorism under a landslide of euros. This aim is tacitly backed by many in Tel Aviv. An Israeli official told me, on condition of anonymity: “None of our politicians can argue for giving money to Palestine while Hamas is in charge. But we don’t want people to go hungry and fall into the hands of the jihadists. So if you guys can figure out how to get the money to ordinary Palestinians, you’ll be doing us a favour.”

This sounds reasonable, but it is based on a false premise, namely that political violence is caused by economic deprivation. This notion derives ultimately from Marx and, like many of his ideas, it looks plausible on the page, but turns out not to be true. Most of the world’s revolutions have taken place, not at times of rising poverty, but at times of rising wealth and aspirations. Put bluntly, people who are worried about food and shelter have little time to go on demos. It is when they have time to sit and brood that their thoughts turn to bloodshed…

The EU, as the largest overseas donor to the PA, has created a subsidy-based society, as sulky, lethargic and corrupt as any on earth. But it doesn’t have to be this way. Palestinians are a naturally enterprising people who, in other Arab states, often form the professional and administrative class.

They have the winning combination of cheap labour and an educated workforce, but lack access to world markets. Israel, like any besieged nation, prioritises the safety of its own citizens and so seeks to limit the traffic in and out of the Occupied Territories. Palestinians thus find their external borders closed, and their roads often blocked by checkpoints.

Easing these restrictions would not solve everything. Trade and investment would not, in themselves, end a conflict with ethnic, religious and territorial dimensions. But a capitalist Palestine, in which citizens looked to themselves rather than to the state, would be more stable. Its propertied classes would have a stake in civil order. Its businessmen would have an incentive to remain on cordial terms with their customers, including those in Israel.

None of this will happen, however, as long as Palestinians remain trapped in the squalor of dependency. The EU, in its well-intentioned but doltish way, is fuelling the conflict.