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http://www.thetower.org/article/the-eus-israel-problem-goes-far-beyond-labels/

EU’s Israel Problem Goes Far Beyond Labels

Steven J. Rosen

Steven J. Rosen

Former AIPAC senior official, consultant to European pro-Israel organizations

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~ Also in this issue ~

~ Also by Steven J. Rosen ~

From the Blog

Although Europe’s most important leaders are vocally opposed to boycotts of Israel, unelected bureaucrats in Brussels are working to make isolating Israel an official EU policy.

The European Union is Israel’s largest trading partner, and often portrays itself as a dedicated if sometimes critical friend of the Jewish state. But as its recent decision to label products manufactured in Israeli settlements shows, there are forces seeking to drive a wedge between the EU and Israel.
There are two groups involved in this campaign. One is a highly visible outside lobby of citizen advocates—the dozens of NGOs led by the Boycott Divestment and Sanctions (BDS) movement. BDS proponents demand a complete “freeze” of the EU-Israel Association Agreement signed in 2000, as well as a boycott of Israeli banks and corporations. They disparage small steps like labels on products and produce from the West Bank.
It is true that Europe’s top elected leadership is opposed to boycotts in general and boycotts of Israel in particular, as British Prime Minister David Cameron, French President Francois Hollande, German Chancellor Angela Merkel, and EU High Representative for Foreign Affairs Federica Mogherinihave recently reaffirmed. As EU Ambassador to Israel Lars Faaborg-Andersensaid in November,
The EU is against the so-called “BDS” and we are against any attempts to isolate Israel. … Relations with Israel are among the closest … the EU has with any non-member state. Israel’s trade with the EU … has increased from 20 to 30 billion euros per year over the last 10 years. …We have signed agreements on liberalizing trade in agricultural and fishery products, on research cooperation, on air traffic, [and on] pharmaceutical products. … Europe is not boycotting Israel.
But there is another group working in parallel with the BDS movement. It is a far more effective lobby that works quietly behind the scenes in order to accomplish the same goals. This group is embedded in the complex bureaucracy of the EU and its member states—the officials known colloquially as the “Eurocrats.” It focuses on incremental measures rather than advocating a complete boycott of Israel, and it has proven far more successful than its radical counterpart.
Israel’s detractors inside European ministries see Israel’s relationship with the European Union as an opportunity to apply pressure on the Jewish state, rather than a desirable goal in itself. In agencies like the European External Action Service (EEAS—the EU’s foreign ministry) and the European Commission (its executive branch), the officials charged with organizing policy options for the European Council—the heads of government of EU member states—are intensely interested in the Palestinian perspective and highly critical of Israeli policies.
The beliefs of this camp are reinforced by a steady stream of one-sided reports portraying Israel in a negative light. An information pipeline from the Mideast to Brussels is fed by pro-Palestinian advocacy groups operating in the West Bank and Gaza, as well as far-Left Israeli groups allied with them. Many of these NGOs are funded by European governments and foundations, and they work in close consultation with official European envoys in Ramallah and Jerusalem. These envoys integrate the NGOs’ allegations into their own reports and forward them to Brussels and their own capitals. In many cases, the government of Israel does not have the opportunity to vet these one-sided reports.
This camp is led by officials like Christian Berger, the Director for North Africa, Middle East, Arabian Peninsula, Iran, and Iraq in the EEAS. He is also the top Mideast aide to Mogherini, the EU’s foreign affairs chief. His views are supported by like-minded bureaucrats in European foreign ministries.
Another source for such reports is the European Heads of Mission in Jerusalem and Ramallah, nicknamed HoMs. It annually produces a highly critical end-of-year report on Israeli activities in East Jerusalem that it sends directly to the European Union’s Political and Security Committee, which then formulates policy. Typically, these HoMs reports include recommendations for sanctions and other forms of political and economic pressure on Israel. Though meant to be confidential, these reports are routinely leaked to Haaretz, a sympathetic Left-wing Israeli newspaper. Individual European ambassadors also send detailed reports to their foreign ministries and offices in Brussels.
The Berlaymont, the headquarters of the European Commission. Photo: Murali Mohan Gurram / flickr

The Berlaymont, the headquarters of the European Commission in Brussels. Photo: Murali Mohan Gurram / flickr
These groups are joined by some former EU and European government officials whose views are given great weight by the Eurocrats. For example, 19 prominent ex-officials, assembled as the European Eminent Persons Group, recently wrote to senior EU officials urging a variety of ways to pressure Israel and support the Palestinians. The group included such luminaries as Javier Solana, the former EU High Representative for Common Foreign and Security Policy; Miguel Moratinos, the former EU Special Representative for the Middle East Peace Process; and Ruprecht Polenz, former Chairman of the Foreign Affairs Committee of the German Bundestag and ex-Secretary General of Chancellor Merkel’s political party, the CDU.
There is also an outside think tank allied to Israel’s critics inside the EU bureaucracy—the European Council for Foreign Relations. It is strongly supported by top J Street donor George Soros. In July 2015, it published areport proposing an array of severe sanctions against Israel, and is marketing that report aggressively.
In October 2014, new rules came into effect that increased the Eurocrats’ power to influence Israel’s ties with the EU. When an action has been proposed to the European Council by the European Commission, the Council’s 28 member states no longer need to support it unanimously.Article 228A of the new Treaty of Lisbon states that a decision “to interrupt or to reduce, in part or completely, economic relations with one or more third countries” can be approved by a “Qualified Majority.” This means that a policy can be adopted if it has the support of only 55 percent of member states, representing at least 65 percent of EU citizens. If a decision is approved by a Qualified Majority, no single member state can veto the Commission’s recommended policy. This greatly improves the Eurocrats’ chances of enacting anti-Israel policies.
The Eurocrats advocating pressure on Israel have already scored some major achievements.
One is the decision taken over the past five years to condition Israel’s access to European markets on its policies toward the Palestinians. In previous years, this linkage was not as strong. Beginning in 1995, the European Union signed more than 20 agreements with the State of Israel without demanding concessions to the Palestinians. This changed when the EU reviewed its European Neighborhood Policy—the framework for relations with Israel—in 2010-11. The EU introduced a new policy known as “more-for-more and less-for-less.” Under this policy, the EU will develop stronger partnerships with and offer greater incentives to countries that make more progress on human rights issues. Applied to Israel, this has been taken to mean that any future upgrades will be considered in light of Israeli policy toward the Palestinians and progress toward a two-state solution.
This linkage was codified by a European Council decision in July 2012. On the one hand, the Council extolled “the significance the EU attaches to its relations with the State of Israel” and reiterated “the importance of further developing our broad, bilateral partnership.” It endorsed a wide-ranging list of new measures “to fully demonstrate the capacity of the current EU-Israel Action Plan to deliver more benefits to the EU-Israel partnership.”
But the 2012 decision also declared that any upgrade in relations with Israel must be taken “in the context of … the resolution of the Israel-Palestinian conflict through the implementation of the two-state solution [and] the promotion of peace.” In effect, the Council decided on a policy of political linkage: Concessions to the Palestinians will be rewarded by closer economic ties, but upgrades will not be forthcoming if Israel fails to make the concessions Europe deems necessary.
EU High Representative Federica Mogherini meets with Israeli Prime Minister Benjamin Netanyahu in Berlin, October 22, 2015. Photo: EEAS / flickr

EU High Representative Federica Mogherini meets with Israeli Prime Minister Benjamin Netanyahu in Berlin, October 22, 2015. Photo: EEAS / flickr
In December 2013, the Council made its “more-for-more” offer explicit. The EU offered Israel an “unprecedented package of European political, economic, and security support” comprising a “Special Privileged Partnership.” Israel would receive “increased access to the European markets, closer cultural and scientific links, facilitation of trade and investments, as well as promotion of business to business relations.” The package would also include “enhanced political dialogue and security cooperation.” But all of this would be in exchange for Israeli concessions to Palestinian demands leading to a two-state solution.
The problem with these stipulations is that the majority of Israelis have not been persuaded to take the risks the Europeans believe would lead Israel to peace. At the moment, the Israeli majority does not believe there is an Arab partner who can be trusted to sign a realistic agreement and live up to it. They see holy sites like the Western Wall as part of the Jewish homeland and their historical patrimony. And while most Israelis favor a territorial compromise on the West Bank, it must be one in which Israel’s legitimate religious, historic, and security rights to the disputed territories will be taken into account
But European detractors dismiss all of this as Israeli “intransigence.” As a result, many now want to go beyond the “more-for-more” policy in favor of its opposite—“less-for-less.” As a result, the policies they advocate are more about sticks than carrots.
In February 2010, for example, the European Court of Justice ruled that the “territorial scope” of all Israel-EU agreements is limited by Europe’s Association Agreement with the PLO, which gives it—not Israel—legal authority over the West Bank and Gaza. In 2012, the European Council followed suit, declaring that agreements with Israel must “unequivocally and explicitly indicate their inapplicability to the territories occupied by Israel in 1967.” In effect, the EU has declared that any Jewish authority or presence in the West Bank is regarded as unlawful and forbidden. The recent decision on labeling settlement products is an application of this European “territorial scope” principle.
The European Parliament chamber in Strasbourg. Photo: David Iliff / Wikimedia

The European Parliament chamber in Strasbourg. Photo: David Iliff / Wikimedia
But the application of the policy can be expanded much further. On September 10, 2015, the European Parliament adopted a resolution calling for “differentiation between Israel and its activities in the occupied Palestinian Territory.” As a proponent of the policy told Haaretz, “This is the first time … that [a] top EU institution uses the word ‘differentiation.’ … This is gradually becoming an automatic policy.” It “clarifies the distinction with boycotts and makes it more acceptable for a number of European governments.”
Former Israeli Foreign Minister Tzipi Livni warned that, while the initial target of European “differentiation” is often declared to be settlement goods, “Their problem is with Israel, which is seen as a colonialist country. Therefore, it won’t stop at the settlements, but [will spread] to all of Israel.” A key European foreign minister agreed that “the mood in some [European] countries is that if you don’t change, [it] could lead to a boycott of all [Israeli] goods.”
Livni’s warning is borne out by recent events. Israel’s detractors in the EU are working hard to extend the “differentiation” principle to a European boycott of major Israeli banks and corporations that have even incidental involvement in any activity outside the pre-1967 lines. The European Council on Foreign Relations stated that this is based on the fact that Israeli banks “play a crucial role in financing the … activities that … sustain the settlements” by issuing mortgages and loans. Through transactions with Israeli banks and multinational corporations, “European banks could actually be increasing the supply of capital directed into Israeli settlement-related lending and investment.” Going further, it questions whether branches of Israeli banks should be licensed at all in the EU. “The fungible proceeds of [their] operations [could be] employed to fund activities that … are unlawful according to EU law.”
One step beyond a narrow boycott of settlements to a wider boycott of Israeli entities has already been taken. In 2013, the European Council adopted a set of rules for EU “grants, prizes, and financial instruments” that could potentially apply to all major Israeli financial institutions. In Article 12B of its 2013 “Guidelines on the Eligibility of Israeli Entities … from 2014 Onwards,” the Council ruled that Israeli entities would be ineligible if they operate in East Jerusalem or the West Bank “either in the framework of EU-funded financial instruments or otherwise.”
A wider boycott of Israeli companies operating in Jerusalem or the West Bank could have a significant effect on Israel’s entire relationship with the EU. All of Israel’s major banks engage in at least some business activity outside the pre-1967 borders, such as issuing mortgages in eastern Jerusalem, where nearly half the city’s Jewish population lives. Eastern Jerusalem communities are part of sovereign Israel under Israeli law, but are treated as “illegal settlements” under the EU directive. Along with Israeli banks, many of Israel’s largest and most innovative companies and nonprofits have at least some incidental or secondary involvement with economic activity that crosses over the pre-1967 lines.
Stigmatizing Israeli entities in this way can also have a wider chilling effect. A European company or bank may reconsider getting involved with its Israeli counterpart if, by doing so, it could run afoul of the EU bureaucracy. Organizations promoting boycotts of Israel may try to embarrass any European firm that has contact with Israeli partners. The “settlements” taboo could become a scarlet letter that stains almost any Israeli entity that operates in Jerusalem or even the settlement blocs that are certain to remain part of Israel under any peace treaty. Out of an abundance of caution, European companies may steer clear of Israeli partners altogether in order to avoid any possible taint.
Up to now, the EU has sought to deny that this will be the case. While it now labels settlement products, European officials deny that this constitutes a boycott. “Europe is not boycotting settlements,” EU Ambassador to Israel Lars Faaborg-Andersen said in November. “Products from settlements will continue to enter the EU market,” though without duty-free preferential treatment. “Ever since the UK introduced guidelines on origin labeling of settlement products back in 2009, trade between Israel and the UK has doubled,” he added. Time will tell whether such reassuring statements hold true.
Momentum is building for further EU measures against Israel. In September 2014, the decision-making Political and Security Committee of the European Council tasked the European Commission with recommending additional means of pressuring Israel to change its policies toward the Palestinians. In November 2014, the Commission responded with a confidential “Non-Paper.” Its recommendations were immediately leaked and published by Haaretz.
The Commission recommended stronger adherence to the “more-for-more, less-for-less” policy in “future development of EU-Israeli relations [in] possible or new agreements,” as well as “the overall relationship with Israel.” It supported “reassessing EU funding or capacity-building activities indirectly helping to perpetuate the status quo of occupation.” This language could be taken as inviting action against major Israeli banks. The Commission further recommended strengthening the principle of “territorial scope,” including a territorial clause in all EU/member states agreements. It called for “actions to strengthen advice to EU citizens … on settlements and settlement economic activities,” as well as actions to prevent European companies from operating beyond the pre-1967 lines, a process that could encourage private sector boycotts. It also recommended boycotting Israeli public figures who reject the two-state solution.
On the diplomatic front, the Commission called for “actions reinforcing … Palestinian ‘statehood,’” including “denomination and protocol issues; support, or non-opposition, to applications to international organizations; and recognition.” Toward Israel, the Commission called for tougher measures, such as summoning Israeli officials, recalling ambassadors, and hardening EU policy at the United Nations Human Rights Council.
A scene in Brussels. Photo: Magnus Maximus / flickr

A scene in Brussels. Photo: Magnus Maximus / flickr
Issued in the name of the European Commission, and in response to a request from the policy-making Political and Security Committee of the Council, the Non-Paper is a major achievement for Israel’s detractors in the EU bureaucracy. But they have proposed further measures. These include invalidating Israeli legal documents outside the pre-1967 lines, which would affect almost half the Jewish homeowners in Jerusalem; withdrawing the charitable status of pro-Israel groups that “support the occupation”; withdrawing pension and other EU benefits from dual citizens residing in the West Bank; and ending cooperation with Israeli offices headquartered outside the pre-1967 lines, such as the Police, Department of Justice, and Ministry of Construction.
On the diplomatic front, many outside and inside the EU system want Europe to promote a United Nations Security Council resolution setting parameters for a two-state solution based largely on Palestinian demands, a specific date for mandatory Israeli withdrawal from the West Bank, a new Security Council resolution against Israeli settlements, and support for Palestinian actions against Israel in United Nations agencies like the International Criminal Court.
What does all of this amount to? First, it is important say that there is no reason for panic. Israel’s relations with the EU are not doomed. In fact, they are growing and expanding. Israel has many friends in European capitals, as well as a dynamic economy that makes it an effective competitor in European markets. But opposition to Israel is also growing, and it would be a mistake to underestimate the magnitude of the threat. What is needed is a “line of defense” strong enough to challenge Israel’s enemies in the EU effectively.
In particular, a more sustained and systematic effort to recruit allies inside the EEAS bureaus, the Commission, and the leading national ministries is needed. While there are many opponents of Israel in Brussels, these bureaucracies are not monolithic. Nor are they completely closed to outside influence. Pro-Israel advocacy groups have tended to concentrate on the European Parliament because it is an open forum. But it is the harder-to-reach executive branch in which most problems and opportunities begin, and where allies must be found.
Having friends on the inside will increase the chances of identifying threats to Israel early enough to stop them. Intervention in the early stages of the process is far more effective than trying to stop such threats once they have gained momentum. Worst of all is trying to reverse a decision once it has passed through the many arcane processes and byzantine bureaucracies of the European Union.
Friends of Israel should also seek to avoid strident rhetoric. It is counterproductive in the European environment, where reasoned dialogue is the norm. The most effective proponents of the pro-Israel perspective in Brussels are those who can interface with experienced officials as peers.
Europe is not lost, but neither is it won. A serious pro-Israel effort within the EU can make a difference, and that effort should begin now.
Banner Photo: Glyn Lowe / flickr
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