Europe Raises Pressure on Israel - New Guidelines Meant to Keep EU Funds Away from Israeli Groups in Occupied Territories

From The Wall Street Journal:

 

Israel reacted angrily Tuesday to an effort by the European Union to keep EU funds from flowing to Israeli organizations operating in the occupied territories, the latest bump in the sometimes-rocky relationship between Israel and Europe.

The EU move comes on the eve of a visit to the region by Secretary of State John Kerry, who has held several rounds of shuttle diplomacy in recent months to try to persuade Israel and the Palestinians to restart peace talks that have been deadlocked for years.

 

Israeli Finance Minister Yair Lapid said in a statement that the EU had made a "miserable'" decision, but he also said that every day of stalemate hurts Israel's international standing. Many Israelis fear that if negotiations remain stalemated, their country will eventually face an even broader economic boycott.

Currently the EU is negotiating an agreement with Israel on research and innovation funding that could benefit Israeli universities and other organizations, as well as a pact for greater cooperation between the EU police unit Europol and Israeli authorities.

But under guidelines set to be published Friday in Brussels, Israeli entities based in the occupied territories—the West Bank, East Jerusalem and the Golan Heights—would be banned from receiving grants, prizes or other money from the common EU budget, starting in January.

Such accords would then have to include a clause specifying that EU resources couldn't be used in the occupied territories, although some flexibility would be allowed, officials said.

While Israel annexed East Jerusalem and the Golan Heights and doesn't administer them as occupied territories, the international community never recognized the move.

Over the past seven years, Israel has received some €800 million ($1.05 billion) in funding from the EU. Of that, the EU estimates only around 0.5% went to entities in the occupied territories, according to an EU official.

Israeli Prime Minister Benjamin Netanyahu said the EU should focus on the "more pressing'' issues of Syria's civil war and Iran's nuclear program rather than Israeli settlement activity.

"We won't accept any external dictates on our borders," said Mr. Netanyahu at a special meeting of cabinet ministers to discuss the new guidelines. "That issue will be decided solely in negotiations.''

A spokeswoman for EU foreign-policy chief Catherine Ashton said the new guidelines are in line with the EU's "long-standing position" that it doesn't recognize Israeli sovereignty over the occupied territories and that Israeli settlements there are illegal.

The guidelines were prepared "to make a distinction…between the state of Israel and the occupied territories," said the spokeswoman, Maja Kocijancic.

Some EU members have called for an even tougher stance against Israeli settlements, as well as a stricter application of rules on labeling Israeli exports to the EU from those regions.

The EU already charges customs duties on Israeli imports that originate in the occupied territories that would otherwise enjoy free-trade exemptions.

At the same time, EU member states next week could fulfill a long-standing Israeli request to add the military wing of Lebanese Shiite group Hezbollah to its terror list, as the U.S. did years ago.

The EU has long sought to play a role in Middle East peace talks and has recently been urging direct talks between the two sides.

But Brussels has come under fire from Israeli politicians, who accuse the EU of siding with the Palestinians on key issues, while Palestinians have urged the EU to go beyond criticizing Israeli policy and impose sanctions on the country.

Israeli Energy Minister Silvan Shalom, a former foreign minister, said in an interview with Army Radio that the new policy "proves, again, regretfully, how detached Europe is and how it cannot be a genuine and balanced partner in negotiations with the Palestinians."

Israeli Deputy Foreign Minister Zeev Elkin said the decision could prompt EU member states to demand similar limitations bilaterally. The EU guidelines don't apply to the member states individually.

Oded Eran, a former Israeli ambassador to the EU, said the guidelines could cause "colossal damage'' because they could potentially be applied to large entities in Israel that are found to have even the smallest presence in the occupied territories.

But Hanan Ashrawi, a member of the Palestine Liberation Organization's Executive Committee, said the decision would "have a positive impact on the peace process."

She added that "the EU has moved from the level of statements, declarations and denunciations to effective policy decisions and concrete steps."