The Europe-Israel Alliance:
Where Politics and Economics Do Not Meet

Europe & Middle East
Israel & EU: Economic Allies
European Platforms on Arab-Israeli Peace
Economic Sanctions
EU & Current Peacemaking

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Israel and the EU: Political History
The European Union and Current Arab-Israeli Peacemaking

The European Union is the single largest foreign donor to the peace process, accounting for over 53 percent of all economic aid to the Palestinian Authority. (The United States contributes 11 percent of aid). Since 1993, the EU has provided $1.8 billion worth of aid to the Palestinians.
"Israel has resisted a greater EU role in the peace process, maintaining that the EU is not an honest broker because of its overt support of Palestinian demands."
Continued EU economic assistance has helped to finance and train the Palestinian police and to support democratic elections in Palestinian self-rule areas.

After the conclusion of the Oslo Accords, political relations between Israel and the European Union became warmer. Dialogue between the parties increased and Israel’s Labor government did not view the EU as a hostile party in the peace process. During this time, the EU finally agreed to launch talks with Israel on renegotiating the 1975 trade accord.

Political tensions between Israel and the EU resurfaced after Benjamin Netanyahu became Prime Minister of Israel. Following the riots that broke out in the wake of Netanyahu’s decision to open a second entrance to the Western Wall tunnel, the EU designated a special envoy to the Middle East in October 1996. Ambassador Miguel Moratinos was given a clear mandate to work toward a comprehensive peace in the interests of both Europe and the Middle East.

In recent months, the EU has sought a more prominent role in Arab-Israeli peacemaking, seeking to translate its economic aid into political clout. It has echoed the Palestinian charge that the United States is too close to Israel to serve as an honest broker in the difficult peacemaking process.

Israel has resisted a greater EU role in the peace process, maintaining that the EU is not an honest broker because of its overt support of Palestinian demands. A recent poll conducted by Tel Aviv University found that 60 percent of Israelis thought the Europeans were more supportive of the Palestinians, 4 percent thought they were more supportive of Israel and 31 percent considered them neutral. In contrast, 24 percent of Israelis consider the United States to be more supportive of Israel, 20 percent think the U.S. is more supportive of the Palestinians and 50 percent consider the U.S. to be neutral.

In December 1997, the European Council of Ministers adopted the Luxembourg Declaration, a list of 18 points dealing with the Middle East peace process. The document "stressed the great urgency for the parties to live up to previous commitments especially as regards credible and significant redeployments?’ It also "stressed the importance of avoiding counterproductive unilateral actions, for instance on settlements and Jerusalem?’ There was no mention of any "counterproductive unilateral actions" undertaken by the Palestinians.

The Council also pledged to "enhance its support to Palestinian institutions in East Jerusalem’ and "continue to monitor closely developments on the ground through its own human rights, Jerusalem and settlements watch instruments." Regarding final status talks, the Council "expressed the EU’S readiness to contribute to permanent status negotiations, by offering specific suggestions to the parties on related subjects, including possible Palestinian Statehood, borders/security arrangements, settlements, refugees, Jerusalem and water issues."

In January 1998, the European Commission issued a report, The Role of the European Union in the Middle East Process and Its Future Assistance to the Middle East, placing much of the responsibility for the stalemated peace process on Israel. The document blames Israeli closures of the territories for Palestinian economic decline and faults Israeli implementation of the Israeli-Palestinian economic agreements.

Also in January, Britain assumed the rotating presidency of the EU and senior government officials stated that a key priority for the British presidency is the Arab—Israeli peace process. In Britain’s capacity as president of the EU, British Foreign Secretary Robin Cook visited Israel in March 1998. He angered the Israeli Government and the Israeli polity with a visit to Har Homa, the site of controversial Israeli construction in Jerusalem. The Foreign Secretary went to the site in order to protest Israeli building activity in Jerusalem. The European Union later released a statement supporting Cook’s action as in accordance with EU policy.

Further exacerbating the and-Israel tenor of the trip,
"..the European Commission issued a report ... placing much of the responsibility for the stalemated peace process on Israel."
Cook also canceled a visit to Yad Vashem but laid a wreath at the site of Dir Yassin. He also stated, on behalf of the EU, that "I have clearly expressed the anxiety of the European Union about the expansion of settlements and our insistence that if the peace process is to thrive, then there must be a halt to such expansion." The Foreign Secretary expressed no anxiety about Palestinian violations of the Oslo agreements, the unwillingness of the Palestinian Authority to rout out Islamic extremist terrorism and Palestinian inflammatory rhetoric.

At a March 1998 speech to the Anglo-Arab Association, Foreign Secretary Cook reiterated European policy calling for ‘justice for the Palestinians and security for the Israelis" and stated:

"International law requires Israel to withdraw from the Occupied Territories, Southern Lebanon and the Golan Heights. We are clear about the illegality of settlements in the Occupied Territories....

In this policy address, however, Secretary Cook did call upon the Palestinians to increase their security activities:

"We believe that there are five steps [sic] that must be taken to get the process back on track and to restore trust between the parties.

    • Both parties must restate their unequivocal commitment to honor existing agreements.
    • The Israelis must make substantial, credible and urgent further redeployments.
    • There must be a parallel commitment by the Palestinians to a hundred per cent effort on security, and implementation of precise security commitments, complemented by an effective mechanism for their monitoring.
    • A halt to all expansion of settlements.
    • The opening of the Gaza airport, Gaza industrial estate and southern free passage, and an agreement to begin work on the Seaport.
    • The resumption of final status talks as soon as there is progress on the ground...?"

Meeting in Majorca in April 1998, ministers from 11 European and Mediterranean countries again singled out Israeli actions as "unilateral actions contrary to the peace process" and issued a statement calling for:

"… the respect of the principle ‘land for peace,’ the right of the Palestinian People to self-determination, including the establishment of a Palestinian State, and the legitimate right of Israel to live within safe and recognized borders. They (the ministers) consider that Oslo, Cairo and Hebron Agreements have to be fully implemented and have decided to join their efforts in order, inter alia, to:

    • Contribute to a credible, satisfactory and adequate redeployment of Israel from Palestinian territories still under occupation in compliance with the relevant agreements. This redeployment should allow the establishment of a viable future Palestinian entity with territorial continuity;
    • Avoid unilateral actions contrary to the peace process, in particular settlements in the occupied territories, including East Jerusalem;
    • Demand maximum effort in the fight against terrorism and cooperate resolutely with this aim;
    • Urge on all the parties to continue negotiations to achieve progress in the peace process, supporting the efforts currently under way"

Also in April, the EU signed an agreement with the Palestinian Authority on security matters and the war against terrorism. Under the terms of the agreement, the EU will assist the Palestinians in training security personnel and equipping them with surveillance equipment and exchanging intelligence information. Israeli government sources said the agreement was an infringement of the Oslo accords, noting that the Palestinian Authority was authorized to sign agreements with a foreign country only with the approval of Israel.

In April 1998, British Prime Minister Tony Blair visited Israel also in Britain’s capacity as President of the European Union. He tried to be conciliatory in the wake of Cook’s previous visit and he succeeded in inviting Benjamin Netanyahu and Yasir Arafat to London for a new round of talks. Although the May 1998 talks were inconclusive, they did raise the profile of the European Union as a party in the peacemaking process.

The European Union again wielded the economic card in May 1998. The European Commission issued a policy recommendation calling on the EU to exclude Israeli imports from the West Bank, Gaza Strip, Golan Heights and eastern Jerusalem from preferential trade benefits granted to Israel. At stake is an estimated $200 million worth of goods, mainly agricultural produce, that are exported annually from settlements in the West Bank and Gaza.

The 1975 and 1995 EU-Israel trade accords do not define the borders of the State of Israel; Article 38 of the 1995 agreement states that the agreement is to be applied "to the territory of the State of Israel?’ The EU is now claiming that the areas acquired by Israel in 1967 are not part of "the territory of the State of Israel?’ The European commission’s May 1998 policy recommendation states ". . . the international community and international public law take a different view All relevant United Nations Security Council Resolutions lead to the conclusion that neither Israeli settlements in the West Bank and Gaza Strip, nor East Jerusalem and the Golan Heights, can be considered as part of the State of Israel. . . ."

The EU further argues that the economic agreement it signed with the Palestinian Authority recognizes the PA as a separate customs entity.

Israel denies that the 1995 agreement in any way excludes the post-1967 areas from "the territory of the State of Israel." It called the EU action an infringement of the Paris Agreements between Israel and the PA which articulated a "single customs envelope" between Israel and the Palestinians. Israel also charged the EU with taking a one-sided political step that could harm the peace process and warned the EU that pursuing this course of action would disqualify the EU from any future role in the peace process.

Indeed, the EU has only recently adopted this position regarding goods from these areas and, according to a news report in the Israeli daily Ha‘aretz, senior EU official Manuel Mann acknowledged that it was the actions of the Netanyahu Government that prompted the EU to raise this issue. At this writing, negotiations between Israel and the EU aimed at resolving this issue are underway.

Next: Conclusion

This report was published in August 1998

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