Barak Ravid has a blockbuster story in Haaretz: The European Union will now require all its member states to forbid “any funding, cooperation, awarding of scholarships, research funds or prizes to anyone residing in the Jewish settlements in the West Bank and East Jerusalem.” Even more importantly, the guidelines declare that “any agreement or contract signed by an EU country with Israel include a clause stating that the settlements are not part of the State of Israel and therefore are not part of the agreement.” (Some reports suggest the guidelines will also apply to the Golan Heights.)
In other words, the EU will now explicitly distinguish between Israel and the occupied West Bank; and if Israel wants to continue doing any business with the supra-national organization, it will have to admit to this division and lay the groundwork for a genuine separation of sovereignty.
The details of the guidelines have yet to be published, and Israel’s response could change things a little, too. But it’s hard to imagine the EU throwing out its new directives now. It seems to be something Israel will have to accept and adapt to. Here are some quick thoughts, then, on the implications of the EU decision.
1. It’s another signal that the international community is fed up with simply noting the Israeli occupation, and is taking concrete political, economic, and legal action to try and end it. (See also: Palestinian statehood efforts at the United Nations.) Unless Israel wants to be like North Korea, it will have to start recognizing and abiding by these changes.
2. Given that the European Union is Israel’s largest trading partner, Israel will have no choice but to comply with the guidelines—that is, it will have to admit, in legally binding contracts, that the West Bank don’t belong to Israel and will be excluded from the economic transactions. This builds the foundation for continued international efforts to separate Israel from the West Bank.
3. It’s hard to know exact figures when it comes to the place of settlement products in Israeli trade—one estimate put exports from the settlements to the EU at only about 2% of the overall trading relationship. That still adds up to $300 million; the loss isn’t something to sneeze at. The shortfall will have to be made up, either by increasing trade with other actors or by Israeli government subsidies. This, in turn, will have a negative effect on the government budget, which is already in dire straits, forcing Jerusalem to confront some serious financial and budgetary discrepancies.
4. I don’t think this was part of the EU’s intention, but an EU boycott of the settlements will probably energize the BDS movement—which seeks to isolate Israel (not just the settlements) in all of the areas covered by the new guidelines.
5. Paradoxically, at the same time the EU boycott of settlements might energize domestic forces in Israel and American Jewish or other external groups fighting against the occupation. Ravid quotes EU officials as noting that part of the motivation behind the exclusion of settlements is “to be sure that Israel’s participation is not put in question”—in other words, to make sure that Israel is not boycotted or excluded. The EU’s separation of the West Bank from Israel could be used as proof that the settlements are an albatross around Jerusalem’s neck, but that the country itself isn’t in danger just because others oppose the settlements.
6. Also on the Israeli domestic front, the EU decision might galvanize politicians and parties already predisposed to view the settlements as a major political problem. Yesh Atid’s leader Yair Lapid has already said that the decision “will enhance Israel’s isolation” and that time isn’t on Israel’s side. They may be more willing to take a more active position against the settlement enterprise, and in doing so add further pressure on Prime Minister Benjamin Netanyahu to make a serious effort to restart peace talks with the Palestinians. Similarly, it might breathe new life into the recent efforts by the Labor Party and Meretz to use the occupation as a stick with which to beat the government.
Update: Damien Cristofari, an EU official dealing with the Middle East, tweeted that the directives apply only to EU-funded programs, and won’t affect bilateral agreements between member states and Israel.
Update 2: The EU guidelines are now publicly available. See here.