Sanctions mean Israel can no longer play the EU for a fool
On Sunday, the Israeli journalist Gideon Levy published a startling article. As a patriotic Israeli, he wrote in Haaretz newspaper, he had no choice but to declare himself in favour of an economic boycott of his own country until it withdrew from the occupied territories. Given the prospects of "another round of deep stalemate" - a reference to US secretary of state John Kerry's best efforts to rekindle Israeli-Palestinian peace talks - only sanctions would make Israel change.
Mr Levy is a maverick in Israeli journalism, a lone figure trying to stand in the way of the juggernaut of the Israeli state as it settles ever more Palestinian land. His article was greeted with a shrug, perhaps barely even that.
Two days later, it emerged that the European Union, after many years of dithering, had decided that it would not support any settler projects in the occupied territories. None of its grants, prizes or other sorts of funding would be available to settler entities or institutions, and Israel would have to formally accept this condition in applying for funds.
This news was not greeted with a shrug. One Israeli official called it an "earthquake". Prime minister Benjamin Netanyahu issued a defiant statement that Israel would never accept foreign "dictates" on its borders. There were dark hints about the "unhelpful" timing of the move: Yair Lapid, the finance minister, said it would "sabotage" the Kerry mission by encouraging the Palestinians to believe that Israel could be subject to outside pressure.
The move is of little financial significance, but deeply symbolic. The "green line" marking the border between internationally recognised Israel and the occupied territory has long disappeared from Israeli maps. The road network already knits the Jewish settlements seamlessly with major Israeli towns.
The 28 member states of the European Union are not going to change those facts on the ground, and the decision does not immediately affect Israel's $40 billion trade with the EU. But it does mark a belated stiffening of the European backbone.
As Brussels spokespeople have pointed out, the EU has always believed that settlements are illegal under international law. So there is nothing new in its insistence that no money should go to support these settlements. The issue has become more acute now that Ariel, one of the larger settlements on the West Bank, has a university. What is new is that the EU has found the courage to confront Israel and insist that it can no longer shroud its settlements in legal ambiguity.
The measure could not have happened without a change in European attitudes to Israel. Germany, the most careful not to offend Israel, does not disguise the fact that Chancellor Angela Merkel has lost all trust in Mr Netanyahu.
The result is that the EU states are no longer willing to act as what the Israelis would call a freier - a sucker.
The EU funds the Palestinian Authority, thus contributing to Israeli security and covering costs which, if the Authority collapsed, the Israeli treasury would have to pick up. For its pains, it is the target of Israeli abuse.
The latest flashpoint is the Palestinian village of Susya, in the South Hebron Hills, the site of a flagship EU sustainability project including solar panels, greenhouses and a well. The Israeli government has stopped work on the project while it decides whether to demolish it. In the longer term, the government would clearly like to destroy the whole village, to clear the area for Jewish settlers.
The EU disburses money but has almost zero influence - it is a payer not a player. It has only itself to blame, having folded its interests in 2002 into the Middle East Quartet (US, UN, EU and Russia) that effectively meant it became a bag-carrier for Washington.
The Palestinians ask endlessly why Brussels spends so much money for so little influence. We are now seeing an attempt to leverage its expenditure.
Behind all this are two more serious threats to Israel. Brussels is working on guidelines on the labelling of settlement products, including food, to ensure that they are not passed off as Israeli or, if labelled "West Bank", are not bought as Palestinian. Settlement-origin exports to the EU are estimated at some £200m annually. The difficulty of enforcing these guidelines may drive European retailers to choose the easy option and find non-Israeli suppliers.
The second is the growing Boycott, Divestment and Sanctions (BDS) movement that seeks to apply the same pressure on Israel to withdraw from the occupied territories as was exerted on the apartheid government of South Africa. Supporters of BDS argue that the Israeli state is the sponsor of settlements, and therefore it should be the target, not just the growers of organic strawberries and fresh herbs in the West Bank settlements.
In his declaration of support for an economic boycott of Israel, Gideon Levy states this view with typical forthrightness. "The distinction between products from the occupation and Israeli products is an artificial creation," he writes. "All of Israel is immersed in the settlement enterprise … We are all settlers."
Far-sighted Israelis ought to be glad that the EU has taken a step that recognises the distinction between the internationally recognised state and the occupied territories. The distinction may now be academic, with 520,000 Israelis living in the occupied territories including East Jerusalem. But if the EU abandoned that distinction, there would be one less barrier to the arguments of the BDS campaign.
But perhaps public opinion in Europe is moving too fast for such legal niceties to make a difference.
Ben Caspit, a more mainstream Israeli commentator than Mr Levy, worries that the EU move is a sign of Israel losing not just Europe but other allies. "For many years, Israel has wanted to have it both ways, trying to have its cake and eat it, too," he writes. Israel, he says, needs to decide urgently what part to give up. Not many people, however, see Mr Netanyahu making that decision.
Updated: July 19, 2013 04:00 AM