Institutions like the UN and the EU have undertaken strenuous efforts for the realization of a Palestinian State. However, despite a half-century of financial and diplomatic input, the current reality is that there is no independent, democratic Palestinian state. Instead, the peace process has terminated, and security risks are undiminished. A report carried out by thinc., to be published in early December, explores the EU two-state policy, how it failed so far and how to proceed from here. The report shows that the reasons for the failure of the two-state policy are conceptual, legal, and practical and offers recommendations for a new approach.