EU Guidelines

Israeli Economics Minister Naftali Bennett samples halvah at a factory in Ariel, a Jewish community located over the Green Line.  (Assaf Shilo/Israel Sun/Flash 90/JTA)
Israeli Economics Minister Naftali Bennett samples halvah at a factory in Ariel, a Jewish community located over the Green Line.
(Assaf Shilo/Israel Sun/Flash 90/JTA)

While new European Union guidelines directed at Israel’s settlement activity caused an uproar in Israel and consternation among many of its supporters, the rules’ real power seems for now to be largely symbolic.

But the rules, which would ban EU funding to Israeli institutions in the West Bank, Golan Heights and East Jerusalem beginning Jan. 1, seemed to send a different message, depending where the recipient was on the political spectrum. Those on the right saw them as a thumb on the scales for the Palestinians in peace talks with Israel. Those on the left said it was an early taste of what Israel is in for if in the absence of a negotiated settlement.

Prime Minister Binyamin Netan-yahu immediately denounced the rules, when it was clear their release was imminent. “We will not accept any external edicts on our borders,” he said, and advised the Europeans to focus on ending Syria’s civil war or handling Iran. “These problems are little more urgent,” he said.

To Netanyahu’s right, Economy and Trade Minister Naftali Bennett said Israel should respond to the EU with facts on the ground in the West Bank. “More kids, more trees, more vineyards, more homes — that is the real answer to the EU,” he told settlers at a West Bank outpost.

But two key centrists in Netan-yahu’s coalition said Israel can’t afford to ignore EU criticism. Even as Minister of Finance Yair Lapid and Justice Minister Tzipi Livni denounced Europe’s “miserable directive,” coming just as Secretary of State John Kerry is trying to restart peace talks (“They will encourage nothing but delay in the resumption of peace negotiations,” Lapid wrote in The New York Times), both made it clear that Israel cannot continue with the status quo in the territories.

“The decision is a jolting wake-up call,” said Livni, who leads Israel’s peace negotiations with the Palestinians. “It saddens me that we have reached this point, but I hope that it will motivate all those who think we can live with the current stalemate.”

“Time is not in our favor,” Lapid said, “and every day that Israel is not in peace negotiations is a day that our international standing is further damaged.”

Bibi taken by surprise?
After the EU announced on July 16 that it would release the guidelines on July 19, Netanyahu went to work lobbying the Europeans to change their mind. But the prime minister’s initial response suggests that he was blindsided, Michael Koplow, program director of the Israel Institute, said.

“Initially, the way he reacted seemed like he was taken by surprise, which was a surprise to me. The Europeans have been clear, saying this was coming down the road. They’ve been drafting this move for a while.”

The guidelines codify an agreement reached by EU last December, stating that “all agreements between the State of Israel and the EU must unequivocally and explicitly indicate their inapplicability to the territories occupied by Israel in 1967.”

It is not an economic boycott, and it doesn’t affect agreements between Israel and the 28 EU member states. “It largely strengthens existing EU rules and does not affect trade or the private sector,” Lapid wrote in the Times.

The text, which applies to “grants, prizes and financial instruments funded by the EU,” restricts the support to “Israeli entities having their place of establishment within Israel’s pre-1967 borders.”

But it also requires Israel to sign a clause in financial contracts saying that saying that the settlements are not party of Israel.

Responding to the furor, Catherine Ashton, the EU’s top diplomat, reiterated the EU’s “long-held position that bilateral agreements with Israel do not cover the territory that came under Israel’s administration in June 1967.”

“In no way will this prejudge the outcome of peace negotiations bet-ween Israelis and Palestinians,” she said in a statement. “The EU … fully supports Secretary Kerry’s intense efforts to restart negotiations at a particularly delicate stage.”

Reaction in Washington
In Washington, the bipartisan Congressional Israel Allies Caucus wrote to Ashton expressing their “deep concern,” over the guidelines.

“The new guidelines will only serve as a disincentive for the Palestinian Authority to engage in serious final status negotiations,” wrote the caucus, whose leaders include Reps. Eliot Engel (D-N.Y.), Doug Lamborn (R-Colo.), Trent Franks, (R-Ariz.), and Brad Sherman (D-Calif.). “The cause of peace is not advanced by the EU placing blame for lack of progress solely on Israel’s shoulders. This is simply not the case.”

Writing on the Weekly Standard blog, Elliott Abrams, a senior fellow at the Council on Foreign Relations, echoed the congress members.

“EU hostility to the West Bank settlements is not new, but this formulation is remarkable,” he wrote. “The stumbling block to negotiations right now is the Palestinian refusal to come to the table. How does this punitive measure against Israel motivate Mahmoud Abbas to start talking? Does it not in fact signal him to keep staying away, only to see the EU hit Israel harder and harder?”

Abrams wrote that by including the Golan in the same category as the West Bank, the Europeans were saying the Palestinian Authority and the Syrian government were equivalent as potential negotiating partners. David Harris of the American Jewish Committee made the same point in his denunciation of the guidelines.

“And, when the EU refers to the Golan Heights, does Brussels know something about a peace partner in Damascus today that the rest of us may have missed, amidst the widespread carnage there that has resulted in more than 100,000 fatalities to date?” he wrote in a statement, adding,

“The EU ought to recognize what should be obvious, namely, that Palestinian recalcitrance, not settlements, has been, and remains, the foremost obstacle to peace.”

Koplow said while that may be true, the truth isn’t doing Israel any good. In his blog, Ottomans and Zionists, Koplow wrote:

“The Israeli government and outside observers can rage all day that settlements are not the primary cause of the conflict, and there is a large measure of truth to this, but …Israel is suffering because much of the world believes that the settlements are indeed the main problem and will not be convinced otherwise. For better or worse, Israel has to acknowledge that this is the reality.”

Since the guidelines don’t go into effect until Jan. 1, Israel has until then to make them moot, Danielle Spiegel Feld, senior associate for the Israel Policy Forum, wrote on its website.

“If the Israelis and Palestinians manage to make progress on their own between now and [Jan. 1], it will be far more difficult for the EU to justify imposing the type of external intervention in the conflict that the new guidelines represent. Moreover, if the U.S. believes real progress is underway, it will have a significant incentive to lobby against the EU’s meddlesome interventions on Israel’s behalf, “she wrote.

The guidelines have no real teeth — at least for now, Koplow said. “Until the EU does something to affect trade relations, this is largely symbolic,” Koplow said.

Europe is Israel’s largest trading partner, with $36.6 billion in trade in 2012, according to the Export Institute.

So the guidelines are a “harbinger of things to come if Israel doesn’t alleviate Europe’s concerns about its settlements,” he said.

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