Tsafrir Abayov/AP/Press Association Images. All rights reserved.Relations between Europe and Israel are very solid. Since the EU-Israel Association Agreement entered into force in 2000, the European Union has opened many areas for cooperation. However, despite Israel's privileged status, the relationship with the EU has at times been tense. Israel often feels singled out, as happened in the case of the EU’s decision to label settlement goods.

However, the EU has always stated that it will not recognise any unilateral changes to the pre-1967 borders and has insisted on the illegality of the settlements. At the same time it has left some scope for Israel to differ and to apply the bilateral agreements according to its national legislation. It was only recently that the EU took corrective measures to allow the deepening of relations with Israel while at the same time ensuring respect for international law.

EU-Israel relations under the shadow of the settlements

Despite Israel’s ongoing occupation of the Palestinian territory and its settlement expansion, relations between Israel and the EU have been remarkably robust. The EU is firmly committed to the two-state solution, where a viable Palestinian state is established next to a secure Israeli state. It views settlements as a major obstacle to the two-state solution and insists it will not recognise Israel’s sovereignty over the occupied Palestinian territory (oPt). The European Union has always been clear about the illegality of the acquisition of territory by the use of force and its duty of non-recognition of the illegal acts of third states.

At the same time, Israel also held clear positions on the settlements and its refusal to withdraw to the 1949 armistice lines. Since the start of its occupation in 1967, it has embarked on the ambitious project of transforming the Palestinian territory. It has acquired territory through the use of force and denied the Palestinian people their right to self-determination. As there was no sovereign power in the Palestinian territories, Israel argues it cannot be considered the occupying power and that it is therefore not bound to observe the Fourth Geneva Convention. It has gradually transformed the habitat and the demography of the territory and settled its own population.

The peace agreements, starting in Madrid in 1991, were premised on the implementation of UN Security Council resolutions 242 and 338, demanding Israel’s withdrawal from the occupied territories. Yet, the US and the EU did not want to pressure Israel to withdraw to the armistice line of 1949. From the start of the Middle East Peace Process (MEPP), the EU decided not to pursue a rights-based approach in order to maintain Israel's cooperation. Hence, there was no reference in the Oslo agreements to the Fourth Geneva Convention and Israel's obligations as an occupying power, as Israel had vetoed all references to international humanitarian law (IHL). Concretely, Israel was given the right to interpret the agreements according to its own position.

Even if it was agreed that no party shall take steps that change the status of the West Bank and the Gaza Strip, Israel considered the ambiguity in the MEPP as a sign that it could continue the transformation of the occupied Palestinian territory. It’s policy of creating ‘facts on the ground’ has not only undermined the two-state solution, but led to a ‘one state reality’.

1. Under the cover of the peace process, Israel has continued its settlement expansion and increased its control over the oPt. This was done with near impunity as there were no sanctions for non-cooperation in international agreements. This stands in contrast with Russia’s annexation of Crimea, where the EU installed sweeping sanctions.
2. There are currently over 200 illegal settlements and outposts in the West Bank and twelve settlements in east-Jerusalem, with a total population of over 550,000 Israeli civilians. Annexed east-Jerusalem is completely cut off from the West Bank, preventing it from becoming the capital of any future Palestinian state.
3. 60 percent of the West Bank, Area C, is under direct Israeli control. The current Israeli government is outspoken in its refusal to give up this control; several ministers have stated that Israel will not give up ‘Judea and Samaria’. Israel opposes international assistance in Area C and has signalled to the EU that it will demolish projects that benefit the Palestinian population. This recently led to an escalation of demolitions of EU-funded projects by Israeli security forces. In the first quarter of 2016 alone, Israel demolished over 500 Palestinian projects and structures, of which over 105 projects were EU funded.
4. Israel installed a closure policy in 1991 and has gradually reinforced it, which led to the complete separation between the Gaza Strip and the West Bank. Since the Hamas coup in the Gaza Strip in 2007, it enforced a draconian closure, a collective punishment of the civilian population that did not bring Hamas to its knees. Furthermore, Israel is hampering reconstruction efforts in Gaza via ongoing restrictions on the import of construction goods. True, it has eased its restrictions and is allowing 900 trucks per day into Gaza, but this falls short of the daily needs of Gaza’s 1.8 million civilians.

Israel has been given the right to differ 

Its own treaties oblige the EU to maintain consistency between its policies and practices. However, for a long time it has given Israel the right to differ and to apply its bilateral relations with the EU according to its own legislation, in contravention of international law.

This was the case with the Association Agreement, which did not include a territorial clause, that Israel applied to the settlements. Even the Commission’s introduction of a technical arrangement did not allow the EU to effectively implement its own legislation. It is next to impossible and very burdensome for EU customs to exclude settlement goods from preferential treatment through the comparison of postal codes on Israeli proofs of origin and postal codes on a list of non-eligible locations. The only adequate solution would be for Israeli authorities themselves to distinguish between Israeli goods and goods originating in the settlements.

However, the EU and its member states did not want to apply the rules blindly for fear of losing influence in the MEPP. They also believed that through socialisation, Israel would integrate the EU’s norms and values and correct its behaviour. This did not happen and it became clear to European institutions that they needed to change their approach when drawing up agreements with Israel.

Over recent years, the EU has made it clear to Israel that it has positions and commitments it cannot let go of, and initiated a process of differentiation between Israel and its activities beyond the Green Line. Think tanks and NGOs have argued that if the EU wants to conform to its own norms; it cannot let Israel’s wrongful practices decide how EU legislation is implemented.

During the Foreign Affairs Council of December 2009, the Council reiterated its readiness to develop bilateral relations with Israel, while insisting that it will not recognise any changes to the pre-1967 borders. The EU has become increasingly diligent in its approach.

In 2012, the Foreign Affairs Council committed to ensuring that future agreements “unequivocally and explicitly indicate their inapplicability to the territories occupied by Israel in 1967”. A clear basis was established for member state action to prevent the designation of settlement goods as “Israeli”. This resulted in an interpretative notice by the European External Action Service on the indication of the origin of settlement goods in November 2015.

This corrective process also led to the 2013 Commission Guidelines on the eligibility of Israeli entities and their activities in the occupied territories, excluding them from EU grants, prices and financial instruments. The EU’s resolve to implement the guidelines was successfully tested in setting out the terms of Israel’s participation in the Horizon 2020 programme.

Conclusion: the EU has run out of carrots  

The worrying developments on the ground call into question the EU’s approach towards the MEPP. Sitting on the sidelines does not help, nor does offering carrots without brandishing any sticks. The EU has not gained more leverage over Israel. On the contrary, Israel has largely ignored the EU’s appeals to respect its obligations as an occupying power.

Furthermore, Israel has started to thwart the EU’s goals, such as Palestinian state-building, and has openly provoked it. The demolitions of EU funded projects and the attacks on EU funding for human rights, show that Israel is mainly interested in partnership where there are gains, without willingness to work on respect for IHL and commitment to shared values. 

The demolitions of EU funded projects show that it is time for a break; the EU needs to consider how it wants to balance deepening  relations with Israel by adhering to its own values and norms and its commitment to Palestinian state-building. Future cooperation should continue to bring the relations with Israel in alignment with the EU’s positions. Furthermore, it should drive a process that promotes compliance with international law. Ongoing impunity and lack of accountability is a bad basis to continue this relationship.

The EU needs to confront Israel with the fundamental choice of whether it wants to continue its occupation and systematic violations of international law (with all the criticism that comes along with this) or if it wants to be a full and respected member of the international community.