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EU ban of grants to settlements ruffles a few feathers

In July, plans to block European Union money from reaching Jewish settlements on occupied Palestinian territory became official. The ban will make institutions and entities in the settlements – which are outside Israel’s pre-1967 borders and are illegal under international law – ineligible for EU grants, prizes or loans, starting from 2014. While individuals would not be affected, any Israeli organisation with links to the West Bank or East Jerusalem would be.


Tensions have flared; the move angered Israel’s right-wing government, which responded by announcing new limitations on EU aid projects to Palestinians in the West Bank. The EU foreign policy head, Catherine Ashton, has responded by saying that the new guidelines were simply “putting down on paper what is currently the EU position”.

But is this ban to be watered down? Ashton has insisted that the EU’s position is unchanged, but has announced that a group of European diplomats will go to Israel with the intention of smoothing over tensions. She said that she does not want to jeopardise Europe’s relationship with Israel and that the ban should be implemented “very sensitively”.

The move has come after considerable pressure from the US Secretary of State, John Kerry, to delay or suspend the ban altogether. A US state department official told Reuters that Kerry said “it’s important for those parties who have an interest in a successful outcome [to Israeli-Palestinian negotiations] that they be supportive of this effort and that they find a way to embrace the negotiators and encourage them to move forward, rather than, as it were metaphorically, bang them over the head”. This echoes the Israeli government’s complaint that the EU ban on funding would hinder, not help, the fragile peace process. Although the EU accord specified that it would recognise whatever borders emerged from peace talks, Israel also accused Europe of pre-empting the outcome of talks by telling Israel where its border should be. Others warned that it could be the start of Europe cutting other financial ties to Israel. Talks between Israelis and Palestinians have recently resumed, after a three year hiatus.

“The Europeans may think this is good for peace but the truth is that it undermines peace because it plays into the hands of Palestinian maximalists,” an official in Benjamin Netanyahu’s office told the Telegraph newspaper. Yet the logic of this claim – that putting sanctions on settlements would hinder the peace process – is flawed, at best. Palestinian negotiators and international observers alike have repeatedly said that continued settlement construction is the single biggest obstacle to peace. One of the reasons that peace talks have been stalled for so long is that Palestine said it would not return to the negotiating table unless settlement construction was halted. Clearly, that has not happened (the government has authorised more building), but the EU move would have been an important gesture to the Palestinians. Building settlements on occupied land is not a human right, but an incontrovertible violation of international law.

While critics accuse Palestinian negotiators of intransigence, for their insistence that an end to settlement building should be a precondition for talks, there is a good reason for this stance. That reason is that settlements are making the reality of a Palestinian state ever more difficult to achieve. A complex system of housing, transport, and infrastructure is springing up on land that was once supposed to form a separate Palestine. This will be ever harder to dismantle, meaning that the land that could theoretically form a viable, independent state, is being irreversibly colonised. The new wave of urbane but ultra-nationalist settler politicians, who were prominent in this year’s Israeli election, explicitly state this as an aim. Naftali Bennett, whose Jewish Home party is a partner in the ruling coalition, has said that settlements are changing the “facts on the ground” and that Palestinians should accept the new reality: that they will never have their own state. The situation is such that many pro-Palestinian activists are now arguing that a two-state solution is functionally impossible, and that a single state with equal rights for all its citizens is the only realistic option for peace.

Of course, the EU ban on financial dealings with the settlements has not been reversed or suspended; Ashton insists that it will go ahead. Discussions will focus on how it is applied so it doesn’t have a negative effect on the relationship between Europe and Israel. An Israeli foreign ministry official told Reuters that “I have a sense that this is going in a positive way.”

Yet, ironically, given that Kerry’s aim in pressurising the EU was to encourage the peace process, he may have already had the opposite effect. Hanan Ashrawi, a senior member of the Palestine Liberation Organisation, told the Jerusalem Post: “Reports of US lobbying the EU on behalf of Israel are extremely discouraging and cast serious doubts on the US mediation role.” Unfortunately, there is so far little to indicate that the current round of talks will be any more successful than the last.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.

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