Last week, EU Ambassador to Israel Lars Faaborg-Andersen warned on Israeli television that the country would face "increasing isolation" if the peace process collapsed, echoing remarks he made in January about a "price to pay" in terms of boycott and divestment initiatives by European companies. Yet last week also saw the official launch of Israel's participation in the EU's Horizon 2020 research programme, making it "eligible to compete for €77 billion worth of industrial research grants over seven years". This juxtaposition is a useful picture of current EU-Israel relations, with close cooperation continuing even as strains have emerged in the context of a troubled peace process and civil society pressure.
Euros in their eyes
The cooperation between the EU and Israel is deep, broad-ranging, and financially significant for both parties: the 2012 upgrade of relations, for example, affected 60 different areas of cooperation. That same year, the total bilateral trade in goods was worth just under €30 billion, with 35% of Israeli imports coming from the EU, and 27% of Israeli exports going to the EU.
Aside from scientific research within the Framework Programme, when it comes to technological innovation the EU sees it very much in its own interest to have close links with the country's hi-tech sector. As European Commission President Jose Manuel Barroso said during a speech at Haifa University in 2012: "A continent such as Europe, that invests heavily in innovation, needs to have close links with a 'start-up nation', like Israel."
In 2012, Israel exported €1.16 billion in military-related technology to Europe, with Israeli organisations participating in 46 projects within the European Security Research Programme. Defence industry giant Elbit, for example, is a partner in ongoing EU projects "totalling €29.2 million". On the eve of Israel's brutal attack on Gaza in November 2012, the EU sponsored an Israeli weapons fair.
Yet aside from the obvious financial benefits, there are also those in the EU supportive of close ties with Israel for ideological reasons. A recent report co-published by the Friends of Israel and Henry Jackson Society portrays "the relationship between the European Union and the State of Israel" as "based on common values", with the latter described as "a vibrant democracy that treasures the core Western values of human rights and rule of law".
Then there is the role played by pro-Israel high-ranking officials and lobby groups like European Friends of Israel (EFI) – with an overlap between the two. One example is Antonio Tajani, Commissioner for Industry and Entrepreneurship, who, in the words of Brussels-based journalist David Cronin, "has acted as Israel's best buddy in the EU hierarchy". Last October, Tajani – who used to be on the board of EFI – led "a delegation of 65 companies and industry association from 17 EU Member States" to Israel.
Reading between the guidelines
Recently, however, there have been some undeniable bumps in the road. The year in review for EU-Israel relations in 2013 was to a large extent dominated by the furore over the EU's publication of guidelines "on the eligibility of Israeli entities and their activities in the occupied territories for grants, prizes and financial instruments".
The guidelines were not 'new' – they clarified pre-existing policy and closed loopholes that enabled EU money to go to West Bank settlement-based entities. The guidelines do not, however, prohibit EU grants for entities that have activities on both sides of the Green Line, so as long as the funding in question is designated for a project inside pre-'67 Israel.
In response to the guidelines, Israel – to quote an EU official speaking to me in Brussels recently – "went nuclear". The official, who has an intimate working knowledge of the guidelines and their publication, said he was surprised by the reaction: "we informed the Israeli embassy here in Brussels and two days later it appears in [Israeli newspaper] Haaretz".
The official suggested that the response was so sharp because the EU was not simply confirming its political position but was using legal instruments to defend it. Thus while a "light" measure, it was still "a precedent", he noted. He also pointed out that last summer saw the EU publish two other similar items: one related to marketing standards for fruits and vegetables, and one on the certification of organic products – both containing territorial aspects.
Yet EU officials were keen to emphasise that issuing the guidelines was closely linked to a desire for further cooperation with Israel – a case of "clearing an irritant from the table", as one put it to me. A senior European External Action Service (EEAS) official claimed that the guidelines were about "facilitating cooperation by removing a lack of clarity when agreements are made". He suggested that Palestinian officials' positive response to the guidelines was because they naively believed everything they read in Israeli newspapers.
Some involved in civil society lobbying of the EU concur with this assessment. One experienced NGO policy officer made an analogy to the sex-education policy ABC – Abstinence, be faithful, use a condom. "The guidelines are 'C', use a condom – you can have sex with Israel, but be safe". This approach, she said, "is based on the EU's problematic distinction between 'good' and 'bad' Israel", referring to the territorial aspect of the guidelines.
Others involved in Palestinian advocacy, however, are more positive. One Brussels-based campaigner told me that the EU's decision to push ahead with the guidelines was, at least in part, a response to pressure from civil society organisations. There is also, she suggested, a fear that the two-state solution is in grave danger, and that the move should be understood as reflecting this fear of no deal being achieved.
Sending a message
If the guidelines were bad enough, from the Israeli government's point of view there is likely worse to come. EEAS officials told me that Brussels is prepared to "get serious if necessary" with regards to two specific measures: the labelling of settlement goods, and the publication of guidance to businesses on settlement trade, known as 'common messages to business'.
The labelling of settlement goods has been an issue for some time, with officials blaming slow progress on energy being diverted to the peace process and the guidelines. There is support for such a step amongst at least a dozen or so member states, and the European Commission "is said to have prepared draft labelling guidelines".
Similarly, the common message to businesses is also ready to be rolled out, with a draft text approved. Though unpublished, it is believed to emphasise the financial and reputational risks for individuals and businesses who get involved in settlement-related activities, with an official comparing it to the advice published by the UK government last year.
This would make it weaker than what many campaigners have hoped for, lacking any serious content on corporate responsibility or reference to the United Nations Guiding Principles on Business and Human Rights (UNGPs). This despite the fact that in June 2013, the EU told the UN Human Rights Council that it "calls on European companies to implement the Guiding Principles in all circumstances, including in Israel and occupied Palestinian territory."
That is broader than the 'common messages' being prepared, and closer to the approach adopted by Dutch pension fund PGGM, which cut ties with Israeli banks on the basis that some of their business was related to the settlements. When I put this to an EEAS official, he claimed that developing a legal policy based on wider complicity was not feasible, with the legal office of the Commission apparently having a conservative interpretation of relevant UN documents, including the 'non-recognition, non-assistance' element of the International Court of Justice's 2004 advisory opinion on the Wall.
A Brussels-based pro-Palestinian campaigner familiar with the work done on the common messages to business told me that, while weak, the document is an attempt to play catch up with fast moving developments: "the common messages can raise awareness but the process has already started, and more divestment will come." More interesting, she thought, would be "the political effect it will have on Israel." EEAS officials confirmed to me that the timing of publication is tied to the progress of Kerry's initiative, as well as Israeli settlement construction.
The big wheel and the small wheel
Whether you're talking about the 2013 guidelines, or the potential labelling and common messages to business, it is clear that a critical factor in the EU taking such measures is pressure from civil society: the big NGOs and smaller solidarity-focused campaign organisations working in Brussels and continent-wide on Palestinian rights and accountability.
One policy worker, citing Israeli activist Michel Warschawski, described the dynamic using a big wheel and small wheel analogy, where the 'small wheel' of more radical, principled groups moves the 'big wheel' of the mainstream NGOs. She explained how in Brussels their work is constrained by the hegemonic discourse and the need to speak in a language that EEAS officials understand. This was an issue raised by other activists I spoke to, including an experienced campaigner who referred to a "tendency in recent years" for "big human rights NGOs to depoliticise everything when it comes to Israel" – a result, she said, "of concluding after years of experience that a technical approach is better" and enhances their credibility.
The disadvantage of this strategy, according to those campaigners coming from a background more shaped by solidarity politics, is that by depoliticising the issues in bilateral discussions, the mainstream NGOs make those groups that do come with political arguments easier to label as 'extremists' – despite the fact that there is very much a political case to be made. Thus while working on a technical level can "be better in the short term", it risks "losing the bigger picture such as the occupation and systematic violations".
The EU officials I met with in Brussels revealed, directly or indirectly, that human rights groups and campaigners are having an impact on relations with Israel. For example, when I asked a senior EEAS official about EU money going to arms industry giant Elbit Systems, he conceded it was an issue being "brought to our attention by civil society more and more" (he also, without prompting, referred to pressure felt in parliament over G4S).
Indeed, when discussing last year's guidelines, EEAS policy makers confirmed that talk of 'closing loopholes' was at least in part a reference to the controversy over settlement-based company Ahava receiving funding under the EU's Seventh Framework Programme (FP7), which was a big campaign focus of pro-Palestinian organisations.
When pushed about close relations with Israel even as routine violations of international law continue, the EU officials were keen to argue that they influence Israel through engagement. One claimed to me that the threat of further measures is more effective than actually implementing them. When it was pointed out that this could sound like empty threats, a senior EEAS policy maker shifted gears slightly, and pointed to a change in Council statements in 2013 from being purely "declaratory" to "operational". It is a question of "overlapping circles", he said to me: "legalities, moral responsibilities of companies, and consumer pressure".
Officials took credit for curtailing anti-democratic legislation in the Knesset during Netanyahu's previous term, while "concerns" about individual Palestinian human rights defenders have, apparently, "been taken seriously". Yet those responsible for formulating policy also seem to have a pessimistic view about their chances of influence on questions of Palestinian human rights due to a belief that for the Israelis, "this is an existential problem".
Is there a Plan B?
For now, the EU's single-minded focus is the peace process, and seeing U.S Secretary of State John Kerry succeed in his drive for a final agreement. Yet there is a kind of blindness, an unwillingness to contemplate a scenario outside of that which the EU has invested in and relied on for so long. When I suggested that successive Israeli governments – not least the current one – have done their best to block the emergence of a genuinely independent Palestinian state, an EEAS adviser to the peace process replied that "the only thing I have in front of me is an Israeli PM who subscribes to a two-state solution".
This desire not to upset Kerry's apple cart, along with a growing sense of panic that the two-state solution paradigm might be about to disappear forever, has pushed the EU to offer what they see as a significant incentive for a deal, as well as help in making a deal stick through contributions to the resolution of final status issues. Central to this effort is the promise of a Special Privileged Partnership, announced in the conclusions of the December coucil meet, where Israel and a future Palestinian state would be offered a smorgasbord of mutual and bilateral cooperation agreements of an economic, political and cultural nature.
The focus of the Special Privileged Partnership, with its promise of substantial reward intended to encourage a deal, means that for those working on the peace process, there is a reluctance to speak of further anti-settlement measures: "there is no menu of sticks" in the words of one. The official advising on the peace process emphasised that the EU sees it in its own interests to have a two-state solution – which is the only solution, he said, because "all the other options are not viable". And if there's no deal? "Let's focus on what we can do now", he said.
But the question of what the EU will do in the event of no agreement is becoming unavoidable – not to mention how EU policy would be affected by developments such as instability in, or even the collapse of, the Palestinian Authority – or potential Israeli measures like annexation of parts of the West Bank. One activist told me that civil society organisations need to be ready for the 'day after' the Kerry plan – though pointed out that with European elections in May, mobilising MEPs to pressure the Commission will be difficult to do until later in the year (the vote is also expected to return a more conservative-minded parliament).
Kerry's April deadline, previously assumed by some to be a make or break moment, has already been stripped of its significance: a 'framework' is all that is promised, which might well be delayed, and about which both sides are permitted to express reservations and objections. The EU might be reticent to launch new settlement-targeted measures while there's still a 'process', but this should be distinguished from decisions by private companies responding to civil society campaigning – where momentum is likely to continue.
A pro-Palestinian campaigner in Brussels, summarising prospects for the rest of 2014, feels optimistic. "There is this dynamic about guidelines and messages to business, the potential failure of the peace process – and just a growing noise about BDS and government and corporate measures. I think the EU is a bit overwhelmed." Perhaps we will soon see that the EU's relationship with Israel, despite its officials' best efforts, is ultimately shaped by pressures and developments outside of Brussels' control.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.