CU L8R EU
Netanyahu & Co. Erase Israel's Economic Horizon
The Israeli leadership's commitment to the settlements is so strong that they'll throw away support from E.U. on the very things that make Israel thrive, writes Gershom Gorenberg.
When you first hear this, it sounds absurd: Benjamin Netanyahu's government would rather pass up a massively profitable partnership with the E.U. than sign an economic agreement that applies only within the Green Line. When you examine the story carefully, you discover that it is really, truly crazy. To continue persuading itself that West Bank settlements are part of Israel, Israel's government is ready to hobble Israeli high-tech and science, the engine of economy. Feeding an illusion is more important than feeding the country.
As you may remember, the European Union issued new budget guidelines on cooperation with Israel in mid-July. They state that E.U. grants, prizes and investments for projects in Israel must be used within sovereign Israeli territory, and not in territory occupied by Israel since 1967. In order to avoid misunderstandings, any future agreements with Israel or Israeli institutions must explicitly reflect these rules.
This is so straightforward it nearly seems unnecessary. When the European Union allocates cash for Israel, it wants the money to end up, you know, in Israel. Neither the E.U., nor any of its constituent countries, nor any other government in the world has ever recognized that Israeli sovereignty extends beyond the Green Line. You did not need a spy agency or Wikileaks to know this previously. For decades, anyone who has asked an European Union official whether an agreement with Israel applied to East Jerusalem or, say, to the Barkan industrial area received a firm "no." (I speak from personal experience.) Had Israel found quiet ways to follow European intent while accepting European largesse, no one in Brussels would have asked Israeli officials to sign that they understood the conditions.There are Israeli rightists who love finding proof that European policy toward Israel expresses eternal anti-Semitism. Were that true, the new E.U. rules wouldn't matter; we'd have no European aid to lose. The guidelines are important because, together and as separate countries, Europe is so supportive of Israel. Besides the free trade agreements that have helped turn Europe into Israel's largest trading partner, Israel has enjoyed extraordinary access for a non-European country to E.U. research funds and partnerships.
This week, as the case in point, Israel is supposed to start negotiating its participation in Horizon 2020, the E.U.'s next seven-year research and development partnership. Over the length of the program, Israel is supposed to contribute hundreds of millions of euros - and is expected to get back 50 percent more than it puts in. This is a continuation of past cooperation. The power cord of the Israeli science and technology economy is plugged into Europe. Last Thursday, Netanyahu and senior ministers met in his office and threatened to pull the plug. Israel won't join sign the Horizon 2020 pact or other agreements with the E.U.—so the usual sources told the media—if those agreements include the territorial clause.
The small problem here is that the Israeli government is threatening Israel, not Europe. If Netanyahu and Co. carry through on their temper tantrum, the Horizon 2020 allocations will be lost, plus potential matching funds from other European sources, plus all the potential profits from software and hardware and biotech and cancer drugs that could be developed here but won't be. To those losses, you can add highly educated Israelis who will find jobs at universities and companies abroad, accelerating an already costly exodus.
Government sources say the European position is an obstacle to the new peace negotiations. This is nonsense. Israel and the Palestinians accepted the U.S. invitation to talks after the E.U. announcement. The guidelines may have convinced a wavering Israeli cabinet minister or two that rejectionism is getting costly. If there's an obstacle to negotiations, it's the latest burst of approval for construction in settlements. On the other hand, Israel will not be making concessions to the Palestinians in advance if it signs an accord with the European Union that limits aid to pre-1967 Israeli territory. It will only be acknowledging a diplomatic reality: The European Union sees the Green Line as Israel's border until such time that a peace agreement creates a new border.
But Netanyahu, his coalition partner Naftali Bennett of the Jewish Home party, and other politicians of the right have tried to convince themselves and the Israeli public that the Green Line has, at most, historical interest. Just a few weeks ago, Bennett was crowing that the world cares about "prices, economics, industry and growth," not the Israeli-Palestinian conflict—as if the conflict couldn't possibly affect economic ties. Netanyahu has believed for years that a well-designed PR kit will persuade Western allies to forget the pre-1967 boundaries.
The European rules create cognitive dissonance: Reality refuses to line up with their convictions. Rather than accept the facts, they are taking a classic gambit of the true believer: proclaiming the belief more loudly, showing greater faith in it, acting as if convincing more people will make it true. But it doesn't. The price of pretense rises, and the believer leaves former friends shaking their heads at his delusions.