An analysis of how the EU’s settlement guidelines will affect Israel and the settlements after the two sides reached an agreement on their disputed terms, as they have been reported thus far.
The European Union will not impose a blanket ban on loans to Israeli entities that operate on both sides of the Green Line. That was the most important concession the EU made in watering down its settlement guidelines in the face of Israeli pressure, preliminary reports of a compromise detailed Tuesday evening.
Instead of banning financial instruments to any company that operates on both sides of the Green Line, as the original wording would have done, the new reported compromise will put the burden of proof on an applicant or recipient to show how they will ensure EU funds do not inadvertently finance settlement activity, Haaretz and other Israeli media reported.
The importance of that concession for Israel is massive. In the domestic Israeli market, there is no Green Line as far as commerce and trade are concerned. Barring financial instruments, i.e. loans, to any company or institution that operates on both sides of the Green Line would have effectively made most Israeli companies and institutions ineligible.
For example, an Israeli petrol company might have been ineligible for EU loans because it operates petrol stations in the West Bank. Now, it must only show how it will prevent EU funds from reaching those gas stations.
On the European side, there is actually little change in the practical applications of the new wording. The point of the blanket ban on granting financial instruments to bodies that operate on both sides of the Green Line was to prevent inadvertent EU funding of settlement activity. With a requirement to make sure that EU money doesn’t make its way to settlements, however, the original goal is fulfilled.
The second change, as reported by the Israeli media, appears to be a semantic change designed to assuage Israeli fears that tacitly accepting the EU guidelines would somehow open it up to international legal action over the illegality of the settlements under international law. While the Horizon 2020 agreement will in the end include a clause saying it must adhere to the EU settlement guidelines, Israel will be allowed to attach an objection to that clause.
The objection is similar in nature to American presidential signing statements, made famous by George W. Bush, who would attach a statement to many laws he signed explaining which parts he did not accept and would therefore not enforce.
As explained in the Haaretz article, the details and wording of the compromise agreement have yet to be signed by the political echelon, so all of this could still change in the coming hours and days.
One thing, however, is for sure: the game changed. While Israel was not excluded from a very important agreement, thereby bringing about tangible consequences for the settlements and ultimately for the occupation, the Netanyahu government was forced onto the defensive.
As Noam Sheizaf wrote earlier today before news of the compromise was announced:
For the first time in decades, a serious debate has started among local elites about what isolation the occupation could cause Israel.
This national conversation – long overdue – is more important than anything in the guidelines themselves.