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Europe remains Israel’s biggest trading partner
EU’s wary support for Palestine

by Laurence Bernard

November 1, 2013

The EU has only just denied financial backing to Israeli entities that profit from West Bank or East Jerusalem activities. Otherwise, it pays up for the Palestinian Authority, but turns a blind eye to Israeli expansion. President François Hollande’s November visit to Israel and Ramallah is not going to change that.

Twenty years after the Oslo Accords, the European Union has just taken the first step toward making credible its official support for an "independent, democratic, contiguous and viable" Palestinian state. A directive published in July makes all Israeli entities (businesses, universities, research laboratories or associations) operating outside Israel’s 1967 borders and pursuing activities in the West Bank or East Jerusalem ineligible for grants, prizes and financial instruments funded by the EU from 1 January 2014.

This should end EU support for companies such as Ahava, which exploits the mineral-rich mud of the Dead Sea, to which Palestinian industry is denied access; and for the Israeli Antiquities Authority, through which Israel has a virtual monopoly on the regulation, conservation and presentation of archaeological sites in Palestine.

The EU has never been able, or willing, to apply the many declarations and resolutions that have accumulated since 2009, which exhort the Israeli authorities to "end all settlement activities, including natural growth, in East Jerusalem and the rest of the West Bank, and dismantle all outposts erected since March 2001" (1). To date, despite recorded violations of UN resolutions and the Geneva conventions, and the International Court of Justice’s advisory opinion on the Separation Barrier (2), the EU has applied no sanctions against Israel.

Dwindling day by day

Yet urgent action is needed, for the politics of the fait accompli continue to erode Palestinian territory, jeopardising the two-state solution. The West Bank has already been reduced to an archipelago of little urban islands by the Separation Barrier, the line of which effectively annexes nearly 10% of Palestine’s territory, and by the fact that 60% of all Palestinian territory — "Area C" (3) — remains under complete Israeli control. This already has 350,000 Israeli settlers living in 35 settlements, compared with 180,000 Palestinian residents. The UN Office for the Coordination of Humanitarian Affairs is concerned at the growth of violence by settlers, the denial of construction permit applications to Palestinians by the Israeli civil administration in charge of the territories, and the systematic demolition of buildings erected "without a permit".

These demolitions include projects financed by the EU, which sometimes pays for the rebuilding of infrastructure destroyed by the Israeli army, such as Gaza’s port and airport, and administrative and security facilities for the Palestinian Authority (PA), notably in Nablus and Jenin, where the EU has spent €30m ($41m) rebuilding two facilities belonging to the Palestinian Authority, which should be completed next year, and rural infrastructure. Even humanitarian relief equipment (tents, shelters, latrines) is regularly destroyed by the Israeli army or by settlers without the EU claiming damages. Only the European Community Humanitarian Office has requested financial compensation — this year — and the request was denied on the grounds that the structures had not been built in collaboration with the Israeli authorities.

There have been many incidents, some involving European diplomats, mostly unpublicised by governments not wanting to cause trouble. The EU has continued to provide funding to strengthen PA institutions (the donors hope for economic growth in the absence of a political solution) without a murmur. Over the years, the PA has been kept alive on this financial drip — the EU pays the salaries of most of its officials, which cost €150m ($203m) a year.

Water resources have always been a major issue: their allocation is still unfavourable to the Palestinians. The Joint Water Council is supposed to promote joint decision-making by both parties, but is used by the Israelis to block most Palestinian projects. The Palestinians only have 20% of the West Bank’s water resources, the Israelis 80%; on average the Palestinians use only 25% as much water per person per day. The international community, including the EU, doesn’t seem to mind financing water treatment projects where the investment and operating costs are more expensive because of restrictions imposed by the Israelis.

The Israeli authorities have expropriated more than a third of East Jerusalem, which they have declared to be part of Israel’s "national territory". There are 250,000 settlers living in Palestinian areas of the Old City and the historic basin, and in the huge modern developments that ring the city. Culture, history and heritage are tightly controlled by the Israeli authorities, which withhold licenses for tourist guides, appropriate artefacts and control archaeological excavations. According to the latest joint report by the heads of EU diplomatic missions in Jerusalem and Ramallah, there seems to be "a concerted effort to utilise archaeology to enhance a claimed historic Jewish continuity in Jerusalem, thereby creating a historic justification for the establishment of Jerusalem as the eternal and undivided capital of Israel" (4).

Despite the unequivocal conclusions of this report, sent to the governments of all EU states, the EU has found it difficult to impose anything on the Israeli authorities, such as reopening official institutions in East Jerusalem, especially Orient House — headquarters of the Palestine Liberation Organisation in Jerusalem until 2000 — and the Palestine Chamber of Commerce.

Blockade of Gaza

In 2010 Israel closed all border crossings into the Gaza Strip, except those at Erez (restricted access) and Kerem Shalom, the only crossing through which certain goods can be imported. With a few exceptions, no exports are permitted. Gaza is already one of the most densely populated territories in the world, with nearly two million people crowded into 400 sq km (4,500 people/sq km), but the Israeli authorities have also imposed a buffer zone along the barrier, between 100 and 500 metres in depth, which denies residents access to 17% of the territory (and 33% of the farmable land). Similar restrictions apply along the coast: the outer limit of the fishing zone, set at 20 nautical miles under the Oslo accord, is now reduced to between 3 and 6 miles. Having failed to get the blockade lifted, the EU’s response has been to provide €15m ($20.3m) to upgrade the border crossing infrastructure at Kerem Shalom.

The plight of Palestinian refugees has also worsened. The UN has registered nearly five million expelled from their villages in 1948 and 1967. A third still live in "temporary" camps in Gaza, the West Bank, Jordan, Lebanon and Syria; 3.5 million rely on the UN Relief and Works Agency (UNRWA) for basic health and education. This costs the EU nearly €300m ($406m) a year in funding to the UNRWA, and the situation has been made worse by the recent influx of Syrian refugees and instability in the region.

What the EU could do

The situation in the Middle East demonstrates the EU’s inability to impose conditions as a basis for a lasting peace in the region. Yet it could easily do so (5). It could accept the important step that its recent directive represents, instead of trying to limit its effectiveness, and refuse to bow to pressure from Israel — which has banned EU representatives from visiting Gaza — and the US. Europe is Israel’s biggest trading partner — trade with the EU is worth nearly €30bn ($41bn) a year — and accounts for a quarter of its exports. The EU could threaten reprisals under the EU-Israel Association Agreement, signed in 2000, freeze specific accords that are already in force or being negotiated (Israel is still the main beneficiary of the EU’s Mediterranean programmes), and suspend negotiations on strengthening the Association Agreement.

The EU could also stop importing goods manufactured or assembled in Israeli settlements in the West Bank. In 2012 a group of 22 NGOs estimated the value of the EU’s imports of such products at €230m ($311m), around 15 times more than the value of its imports of Palestinian products (6). Since they do not depend on direct EU finance, exports of products made in the settlements are not covered by the recent directive. Products labelled "Made in Israel" — but actually made in the settlements — are also exempt from tax; 13 member states are working on a labelling initiative to make the truth clearer to EU consumers. Some, including Ireland, would prefer to see the EU ban such products.

Finally, the EU could take action on the arms trade with Israel, which continues to grow in spite of the EU code of conduct that prohibits sales of military equipment that "might be used for internal repression or international aggression, or contribute to regional instability". Israel’s equipment imports, investment in research (partially subsidised by the EU) and recent military operations in Gaza — which has become a testing ground for weapons technology — have allowed it to boost its own arms exports worldwide. In 2012 they reached a record €5.3bn ($7.2bn), and Israel overtook France as the fourth biggest exporter of arms.


:: Article nr. 102227 sent on 02-nov-2013 11:27 ECT


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