Israel’s European Peace?

MADRID – As the dramatic events unfolding across the Middle East capture global attention, the numerous challenges facing Israel are being largely overlooked. In fact, Israel is confronting one of the most dangerous periods in its existence. Not only do long-standing concerns like the threat of a nuclear-armed Iran remain unresolved; all of Israel’s neighbors are now either beset by or hurtling toward upheaval. And, though US-brokered peace talks with Palestine have resumed, they are likely to end in failure.

But there is one promising development: the European Union, in an uncharacteristic show of backbone, has issued written guidelines prohibiting cooperation with Israeli companies operating in the West Bank and East Jerusalem. This bold move could presage a game-changing role for the EU in bringing about a long-awaited resolution to the Israel-Palestine conflict.

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Such an outcome could not arrive soon enough, especially given the unprecedented chaos on Israel’s borders. In Egypt, the tense, polarized environment following the military’s overthrow of President Mohamed Morsi has created the real possibility of civil conflict. Although Israel was initially apprehensive about an Islamist government across its Sinai border, the Muslim Brotherhood’s value – its ability to influence Hamas, the dominant political force in Gaza – quickly became apparent. The nature and posture of the new military-led regime remains to be seen.

Meanwhile, Syria’s civil war has begun to spill over into Israel’s Golan Heights. The introduction of chemical weapons and the possibility of Western military intervention threaten to draw Israel directly into the conflict. The spillover effects of the Syrian crisis have also unsettled Lebanon, exemplified in the recent spate of sectarian violence, and threaten to destabilize Jordan, which is struggling under the burden of more than 500,000 Syrian refugees.

It is in this highly uncertain context that US Secretary of State John Kerry sought to restart Israel-Palestine peace negotiations. Three potential approaches were discussed: talks without preconditions, talks following a settlement freeze, and talks following the release of Palestinian prisoners.

Unexpectedly, a modified version of the third option – whereby 104 Palestinian prisoners will be released in phases over the course of the negotiations – ultimately facilitated the resumption of talks. Despite its apparent success, however, the bargain dealt a serious blow to the legitimacy of the peace process.

The first tranche of 26 prisoners – all of them tried and convicted by Israeli courts for their involvement in the killing of Israelis – were released from custody in July, ahead of the second round of talks. The problem is that many of their victims were civilians, not military personnel or government officials, causing outrage among the Israeli public. Yet the Palestinian Authority demanded their release, Israel’s government obliged, and the US supported the transaction.

By endorsing a false peace-justice tradeoff, instead of insisting on the more politically difficult option of a settlement freeze, or on the removal of preconditions, the US has jettisoned legality from the peace process. Furthermore, this approach undercuts the credibility of the rule of law in Israel. As Israeli Prime Minister Binyamin Netanyahu put it, the agreement “collides with the incomparably important value of justice.”

That collision is all the more jarring, given that the prisoners are not being released in support of a final agreement; they are merely facilitating the initiation of a negotiation process that appears to lack commitment from either side. Just days before the second round of talks began, Israel announced plans to proceed with the construction of 1,200 homes in the West Bank and East Jerusalem. This suggests that, while the prisoner release may lead to a short-term agreement, it is not backed by a genuine effort to develop the kind of trust-based arrangements that are needed for lasting peace.

Against this background, the EU’s unexpected stand is notable, not only for its technical features, but also for its practical and symbolic implications. In all future agreements with the EU or any of its member states, Israel’s government will have to acknowledge explicitly that territories beyond the pre-1967 borders are not part of Israel.

While the guidelines simply formalized existing EU policy, they drew immediate criticism, with Netanyahu declaring that they “undermined peace” and “hardened Palestinian positions” during negotiations. This strong reaction reflects the profound importance of the EU’s ties with Israel, undercutting the long-held assumption that the US is the only outside actor that can influence Israeli policy. Given the EU’s robust relationship with Israel – underpinned by its role as Israel’s largest trade partner, accounting for roughly 26% of total Israeli exports and 34% of its imports – it can develop powerful incentives that could provide the impetus that the peace process needs to succeed.

The easiest option would be conditional liberalization of trade in services within the existing framework of the EU-Israel Association Agreement. But the challenging strategic environment and legacy of failed negotiations call for a more daring approach: The EU should take the initiative in persuading its partners in the European Economic Area to offer Israel membership, conditional on the completion of a peace agreement. Beyond deepening the EU’s internal market, such a move would serve as a powerful symbol of the value and potential of the EU-Israel relationship, opening the way to further integration in the future.

Europe has an historic opportunity to help resolve one of the world’s longest-running and seemingly most intractable conflicts. It is thus simultaneously an opportunity for the EU to assert itself, at long last, as an effective force in world affairs.