EUROPEAN COMMUNITY, THE
The Beginning of the European Economic Community
After World War II, Europe was suffering from the wide destruction caused by the war and the deep separation between two different camps: one which had struggled for freedom and the other which had tried to subdue Europe under Nazi
Winston Churchill, who had been British prime minister during the war, launched an appeal for European unity on September 19, 1946, in Zurich. The first concrete example of European economic integration was the customs union among Belgium, the Netherlands, and Luxembourg, called "Benelux" which started on January 1, 1948.
U.S. Secretary of State George Marshall was ready to promise American aid for the reconstruction of Europe, on condition that European countries would pool their efforts and would agree among themselves on the distribution of American aid. Thus in 1948 was established the first post-war European organization, the OEEC (Organization for European Economic Cooperation). Many other organizations were created, and like NATO, the Atlantic Alliance, in 1949, the Council of Europe in 1949, an instrument of inter-governmental cooperation with no transfer of national sovereignty.
Robert Schuman, the French minister for foreign affairs, declared on May 9, 1950:
On April 19, 1951, six countries (Belgium, the Federal Republic of Germany, France, Italy, Luxembourg, and the Netherlands) signed the Treaty establishing the European Coal and Steel Community (ECSC). It was thought that by pooling coal and steel, two of the most important raw materials for heavy industry, new military conflicts could be avoided and industrialization could be promoted. This sectorial approach very soon proved itself too narrow, and it was decided to make a bold step forward to full economic integration; on March 25, 1957, the six countries signed the Rome Treaty establishing the European Economic Community (EEC), which entered into force on January 1, 1958.
The creation of a vast common market was the first objective with the aim of reaching higher living standards, full employment, and economic expansion. After some years of a transitional period goods were to flow freely among the six member states thanks to the gradual disappearance of tariffs; a common agricultural policy was established as well. The Commission in Brussels was to coordinate the work and prepare specific proposals to be submitted to the Council of Ministers which alone had the power of decision, thus keeping it in the hands of the member countries; the Commission would then have to implement the decisions taken by the Council.
Israel and the EEC
The French scholar Dominique Moisy divides the relations between Israel and Western Europe into three periods: the first 20 years, in the 1950s and 1960s when "Israel was perceived by Europeans as a courageous and small pioneer state symbolized by the kibbutz"; "the virtual ostracism of the 1970s and the turn of the decade, when Israel was seen mainly as an ambitious imperialist power bent on expansion"; and the new third phase "characterized by a more neutral and less emotional approach to Israel."
The ink of the signatures on the Treaty of Rome was not yet dry when the Israeli government tried to establish contacts with the Community. It submitted a memorandum to the Commission of the EEC in Brussels on October 30, 1958, and a year later Israel was the third country to seek the accreditation of an ambassador as Chief of the Israeli Mission to the EEC, the ECSC, and Euratom. On June 20, 1960, David Ben-Gurion, the Israeli prime minister, met at Val Duchesse in Brussels with Prof. Hallstein, president of the Commission, and with Mr. Rey, member of the Commission in charge of external relations. Ben-Gurion expressed the wish of the Israeli government to sign an association agreement with the EEC.
The Commission submitted a detailed questionnaire to Israel and the Israeli Ministry of Foreign Affairs answered in a memorandum of September 27, 1960, explaining that it was seeking an Association Agreement with the EEC according to Article 238 of the Treaty of Rome; this would entail the creation of a customs union and would lead to the establishment of the clauses for Israeli participation in the framework of the Common Agricultural Policy envisaged by the EEC, as well as the harmonization of the economic and social policies.
During the following years the Israeli Ministry of Foreign Affairs developed extensive diplomatic activity at the Commission in Brussels and in each of the six capitals of the member states as well as in the European Parliament in Strasbourg.
On July 7, 1961, the diplomatic representatives of Israel brought to the attention of the governments in each of the six member countries an identical Note Verbale in which it asked for the opening of negotiations with the EEC on all the outstanding problems without defining beforehand their possible solution.
The Council of Ministers of the EEC decided on July 28, 1961, to invite the Commission to start a study of the relations between Israel and the EEC. Again the Israeli government, in a memorandum of November 24, 1961 to the Commission, expressed its wish to reach a global and preferential agreement, reiterating the same point of view in a note of February 1962 to the six governments. The first parliamentary delegation of the political groups of the European Parliament, headed by Alain Poher, arrived in Israel in February 1962.
In April 1962 the Council of Ministers of the EEC decided to open exploratory talks with Israel, which started in Brussels in May 1962; following these talks the Council of Ministers decided on September 24, 1962, to open negotiations between the EEC and Israel "in order to seek solutions to problems of commercial relations between Israel and the Community." These negotiations started in Brussels on September 26, 1962; the head of the Israel delegation was Mr. Levi Eshkol, then
Israeli representatives explained the repercussions of the Common Agricultural Policy on third-party countries and put forward some original proposals like the idea of "trafic de perfectionnement passif" according to which European raw material included in an Israeli industrial product and re-exported to the EEC should not be subject to the payment of custom duties.
The negotiations were held in three subsequent meetings in Brussels, on November 1962, June 1963, and March–April 1964; they reached a first non-preferential commercial agreement.
The Israeli government had to decide whether to accept this first agreement, limited as it was in its scope, or reject it in order to obtain a larger agreement more suitable to the solution of Israeli foreign trade problems. It was decided to sign the first agreement while at the same time endeavoring to enlarge it. Ambassador Amiel Najar said during the last phase of the negotiations:
Thus the commercial agreement was signed in Brussels by Golda Meir, minister of foreign affairs, on June 4, 1964; it allowed a temporary and partial suspension of the Common External Tariff (CET) on about 20 products of interest to Israel and the removal of quantitative restrictions. Since it was not a preferential agreement, the reduction had to be "erga omnes," i.e., for all members of GATT (the General Agreement on Tariffs and Trade); since Israel was not a major supplier to the EEC for any item, it was very difficult to find products which could benefit Israel without causing an excessive loss to the EEC. Generally it was granted a 20% reduction, reaching 40% for grapefruits, 35% for avocados, and 10% only for grapefruit juice; moreover an acceleration of national tariffs to the CET was decided for some other products, providing a concession of temporary and decreasing value since CET had to be progressively implemented anyway.
The economic value of this commercial agreement was very limited, yet it was the first institutional link with the EEC, establishing a joint committee, and had attached to it an important protocol according to which if the EEC were to give any new concession on oranges to any third country in the future, a review of the commercial agreement with Israel would become possible.
This was a very important principle since it was understood that even without naming the North African countries, they were the first ones to be considered. The North African countries enjoyed a privileged status in the Rome Treaty as previous French colonies, and it was of great importance to avoid the discrimination of Israel vis-à-vis these countries, especially Morocco, in the trade of oranges, a major Israeli export at that time to Europe.
The European Parliament was of great help in that period because even if it had no competence, it gave moral support to the Israeli demands; before the Parliament M. Rey said on January 24, 1964 that the commercial agreement would permit the various problems not yet settled in its framework to be reexamined periodically with the Israeli friends; "we will strive thus progressively to strengthen it and enlarge it."
A report was submitted by M. Blaisse in the name of the Commission for the external trade of the EP in 1964, in favor of "a first agreement giving satisfaction to both parties." An official delegation of the European Parliament came to Israel in November 1964 headed by President Duvieusart. The following year, 1965, Mr. G.L. Moro presented a provisional report proposing a resolution, later approved by the EP, in which Article 1 read:
Thus the principle of an association was reaffirmed by the EP, while Israeli representatives stressed in the meetings of the Mixed Commission in April 1965 and in June 1966 that a global agreement remained the aim of the Israeli government. This goal was stressed in a formal diplomatic note and a memorandum on October 4, 1966, to the Commission and the Governments of the Six in which a demand was put forward to substitute the commercial agreement expiring on July 1, 1967, by an association agreement. In this memorandum it was said inter alia:
The Council of Ministers invited the Commission in December 1966 to start exploratory talks with Israel on the problems raised in this note; thus for the first time the Council was authorizing the Commission to discuss a new agreement with Israel.
In June 1967 the Six-Day War started and on June 7, while the Israeli people were engaged in a struggle for their security, the Commission decided to recommend to the Council of Ministers the conclusion of an Association Agreement with Israel, taking into account the special links existing between Europe and Israel. Undoubtedly this was a decision of great political importance even if it could not be implemented without the consent of the Six at the Council.
A special Committee of the Permanent Representatives of the Six in Brussels envisaged in January 1968 either a preferential
The stand of the member states was divided; in March 1968 the government of the Netherlands declared that the Community should treat in a uniform way all the states of the Mediterranean and therefore they could not accept a preferential agreement with Spain and the North African countries while refusing Israel the same chance. On December 10, 1968, Mr. Luns, then Netherlands minister of foreign affairs, declared:
At the Council meeting of January 27, 1969, Mr. Lahr said that it was necessary to establish a double link in the concessions to be made to the Mediterranean countries: a link in timing concerning the simultaneous conclusion of the agreements and a link concerning the content of these agreements. The idea of parallelism between Israel and the North African countries was raised again in February 1969 at the European Parliament in a resolution in which the Commission was asked to prepare at the same time the association agreements with Tunisia and Morocco and the agreement with Israel.
France, according to the press, in May 1969 still refused to consider a preferential agreement with Israel because of the political situation prevailing in the Middle East. This meant simply that the protests of the Arab states against any further preference to Israel were carefully heard in Paris.
Israel on its side was interested in stronger ties with the EEC both for political and economic reasons; Western Europe was an important market for its exports since its agricultural products were suited to the countries of a continental temperate climate, while its industrial products were most suited for sophisticated countries with a high standard of living. An association would entail a structural change in Israeli industry, probably imposing the closure of the least efficient factories, but the process would enhance productivity and would therefore be a healthy one. One could also hope that the association would encourage European investments in the Israeli economy, which had a level of import of goods similar to that of other Mediterranean countries with a population ten times bigger.
On September 1, 1969, the Commission applied a reduction of 40% on the custom duty on oranges; however, the system of reference prices remained unchanged.
France, probably anxious to make progress with the North African countries, changed its stand and at the meeting of the Council of Ministers of July 22, 1969, Foreign Minister Schuman stated that whoever was in favor of a preferential agreement with Israel must at the same time accept the same principle for any Arab country asking for it as well. This idea was accepted by the other members of the Community and the way was open for a decision. On October 17, 1969, the Council issued the mandate for the negotiations "within the general framework of its Mediterranean policy and in expectation of a balanced development in its relations with the countries of the region."
Finally a preferential agreement with Israel was signed on June 29, 1970, in Luxembourg; on the same day a similar treaty was signed with Spain: the Netherlands would have opposed the signature of an agreement with Spain, because of the Franco regime, and made it conditional on a simultaneous signature with Israel.
An association under Article 238 was refused to Israel mainly on political grounds, but a new interpretation was given to Article 113, on which also this agreement was based, in order to give it a preferential nature. Under the clause of the agreement, which entered into force on October 1, 1970, with a duration of five years, more than 850 Israeli industrial products exported to the EEC benefited from a reduction in custom duties which progressively reached 50%. Some sensitive products were put on a special list and given a smaller reduction or a quota ceiling (cotton fabrics); other Israeli products were totally excluded. It was then that the important principle of some reciprocal treatment was established by Israel for goods originating in the EEC; these goods were divided in four categories and a reduction of between 30% and 10% was granted by Israel. The value of custom reduction given by Israel was equal to 40% of that granted by the EEC to Israel.
Israeli agricultural products were granted a 40% reduction in customs duties for citrus, bananas, and avocados; a 30% reduction for fresh vegetables and 40% on fruit preserves. No modification was introduced in the system of reference price.
Some Arab states opposed the conclusion of the new agreement with Israel fearing that it would weaken the Arab boycott; the secretariat of the Arab League sent a memorandum to the Commission threatening to impose a boycott on the EEC members. There was also a hint that Arab oil producers would reconsider their policy if Israel were to be linked to the Community.
The Enlargement of the Community
The accession of Great Britain, Denmark, and Ireland to the Community on January 1, 1973, created a completely new situation that could deeply affect the Israeli economy. Israel
The Mediterranean Policy
On February 9, 1971, the European Parliament adopted a resolution inviting the member states to draw up a common policy towards the Mediterranean countries. At the meeting of the EEC Council of Ministers on June 26–27, 1972, Maurice Schuman, French foreign minister, presented a completely new idea: that a "global solution for manufactured products" be found to solve most of the problems of Spain, Israel, and other Mediterranean countries.
The official Israeli reaction to the French proposal was stated by Foreign Minister Abba Eban in a press conference given on August 7, 1972:
On November 6 and 7, 1972, the Community Council of Ministers set out the guidelines of the global approach which was to include all the countries of the Mediterranean plus Jordan, with the aim of creating free-trade areas progressively covering also the main agricultural products, as well as organizing financial cooperation for some countries.
On January 30, 1973, a protocol was signed by the Community with Israel and a formal promise was given that a new agreement should be negotiated and would enter into force before January 1974, when the first adjustment to CET was due to take place in Great Britain.
The Council gave a first mandate to the Commission on June 25/26, 1973, but it was not possible to respect the timetable and to complete the package deal with Israel, Spain, Morocco, Tunisia, Algeria, and Malta before the end of the year. At the very last moment the British government decided unilaterally to apply a "standstill," not raising duties on imports from the six Mediterranean countries. The danger of a negative repercussion on the Israeli economy deriving from the British adhesion was thus temporarily avoided.
A wide range of opinions appeared once more among the member states of the Community. France gave all its support to Spain and the North African countries and stressed its friendship for the Arab countries. Italy was torn between the necessity of paying for most of the concessions to be made on agricultural products of other Mediterranean countries, often in competition with its own, and the desire to play fully its role of a Mediterranean power. Germany, the main commercial partner of the Mediterranean countries, had a moral obligation to Israel and the will to reach an understanding with the Arab states, while generally helping in removing obstacles in the way of the Israeli agreement. In the Benelux countries the business community was eager for closer links with Spain, while public opinion and Parliaments were against Spain for political reasons and in favor of closer links with Israel. A compromise was found enabling each member state to foster its political and economic goals in accordance with its sympathies and interests. In order to avoid United States' opposition to the Mediterranean policy, Great Britain asked and obtained the assurance that no reverse preferences should be given by the southern Mediterranean countries, with the exception of Israel, to the EEC.
After a first round of negotiations, the Commission sent back its proposals to the Council, accepting most of the Israeli requests, in order to obtain a "supplementary mandate." The Council met again and in its session of July 22/23, 1974, gave the general guidelines for a new mandate.
In December 1974 a new round of negotiations led, after a non-stop meeting from 3 P.M. till 7:25 A.M. next morning, to an agreed text of the new treaty establishing a free trade area for industrial products. The new agreement was signed in Brussels on May 11, 1975, by Foreign Minister Yigal Allon for Israel and by the Irish foreign minister, Garrett Fitzgerald, for the EEC. The agreement, which came into force on July 1, 1975, has no time limit and is therefore still in force; it is of a much wider scope than the two previous ones as it establishes a free trade area although limited to industrial products; Israel gave full reciprocity but with a delay of some years. Thus, while the EEC completed tariff dismantling on Israeli goods already on July 1, 1977, the gradual implementation of the same dismantling by Israel on EEC goods was completed on January 1, 1989, simultaneously to goods originating in the United States thanks to the Free Trade Agreement between Israel and that country.
The Israeli industrialist could now look at the whole Community as its potential market and should be able to produce on a much bigger scale well above the needs of the Israeli domestic market. On the other hand the competition with European goods was now felt inside Israel itself and this implied the need to reach higher productivity, better quality, and in general a more competitive product.
The first aim of the EEC was political although at first it was easier to build the economic side; in November 1970 the foreign ministers of the Six discussed for the first time in Munich a common stand on Middle Eastern problems. Immediately after the Yom Kippur War of October 1973, an oil boycott was declared by OAPEC, the Arab Oil Producers Organization, against the Netherlands and Denmark. This provoked the Declaration of the Nine of November 6, 1973, a kind of total surrender to the Arabs in which four principles were established as the basis for the common European policy: the inadmissibility of acquisition of territories by force; the necessity for Israel to end the territorial occupation in place since 1967; the respect for suzerainty, territorial integrity, and independence of every state of the region and their rights to live in peace within secure and recognized borders; the recognition that due account should be taken of the legitimate rights of the Palestinians.
The beginning of the Euro-Arab dialogue at the end of December 1973 in Copenhagen and its subsequent evolution was a factor for a change to a growingly pro-Arab stand. The Declaration of the Nine in Venice was given on June 13, 1980, after the historic meeting of President Anwar Sadat with Prime Minister Menachem Begin in Jerusalem and the subsequent signature of the Peace Treaty between Israel and Egypt in 1979. In December 1979 the Soviet Union invaded Afghanistan. Some believe that the strategic aim of Europe was to use the outraged feelings of Third World countries regarding the invasion in order to reinforce the European presence in the Islamic world. To this purpose the price of supporting the Arab thesis, the PLO, and the right to self-determination of the Palestinians did not seem too high. According to the Venice declaration of June 13, 1980, the countries of the European Community would be ready to participate in "a system of concrete and obligatory guaranties including in the field" (Art. 5), the Palestinian people should be able "to exercise fully its right to self-determination" (Art. 6), the PLO "must be associated with the negotiations" (Art. 7), the Jewish settlements in the administered territories are considered to be illegal and "a grave obstacle to the peace process" (Art. 9), Israel should put an end to its territorial occupation (Art. 9). Israel did not agree to the text and the spirit of the Venice declaration which ignored the Camp David peace treaty between Israel and Egypt and was considered to be unbalanced and pro-Arab.
The Israeli invasion of Lebanon in 1982 brought the relations with the states of the EEC to their lowest ebb; the Ten at Luxembourg in their declaration of June 29, 1982, maintained "their vigorous condemnation of the Israeli invasion of Lebanon," demanded "an immediate withdrawal of Israeli forces," and "a simultaneous withdrawal of the Palestinian forces in West Beirut" and admonished that:
The Council of Ministers also decided to suspend the signature of the second Financial Protocol already initialed. Israel was even accused by Mr. Pisani, member of the EC Commission, to have blocked European humanitarian aid to Lebanon – which had never been sent in the first place.
At the beginning of September 1982 the massacre at Sabra and Shatila provoked the "profound shock and revulsion" of the Ten; they also welcomed the American initiative contained in President Reagan's speech of September 1, 1982, and underlined "the importance of the statement adopted by Arab heads of state and governments at Fez on September 9" calling "for a similar expression of a will of peace on the part of Israel" (Declaration of the Ten of September 20, 1982).
At the European Council of Stuttgart (June 17–19, 1983) the Ten, under the presidency of Germany, took a positive view of the Israeli-Lebanese Peace Treaty and decided to resume normal relations with Israel allowing for the signature of the second financial protocol and the meeting of the Council of Cooperation. In the Dublin summit of December 3–4, 1984, the Ten reiterated that the PLO must be associated with negotiations but refrained from any new Middle Eastern initiative. Bettino Craxi was the first European prime minister to go and meet Yasser Arafat, in Tunisia on December 7, 1984. The Ten had mixed feelings about American initiatives; they considered Arafat as a moderate who could be convinced to state publicly the abandonment of terror; they felt that if Arafat disappeared any successor might be much more radical. The huge economic interest of many European companies in the Arab countries seemed best assured by intimate contact with Arafat.
In the year 1985 two events showed how wide the gap between the Europeans and Israel had remained: the Israeli raid on the PLO headquarters near Tunis on October 1, and the hijacking of the Italian boat Achille Lauro some days later. The first was compared by an Italian minister to the Nazi killing of innocent hostages, among them Jews, by the Nazis in Fosse Ardeatine near Rome in March 1944; the second gave rise in the Italian media to the idea that Israel could avoid Palestinian terrorism if it only agreed to make concessions to the PLO.
The Israeli prime minister, Shimon Peres, launched a peace plan at the General Assembly of the United Nations in New York in October 1985, with the idea of an international conference that would accompany direct negotiations among the parties. Peres presented an Israeli scheme for peace at the Council of Cooperation in Brussels in January 1987. The declaration of the Twelve of February 23, 1987, reasserted that a negotiated solution in the Middle East should be based on the Venice Declaration; the Twelve were in favor of an international conference under the auspices of the United Nations and they expressed the wish "to see an improvement in the living conditions of the inhabitants of the occupied territories."
The entrance of Spain and Portugal into the European Community on January 1, 1986, worried Israeli farmers because 70% of their total production is exported and about
At a very early stage, in 1982, the Israeli Mission in Brussels voiced its concerns about the possible negative repercussions of the entry of Spain; the EC decided that traditional currents of trade should be allowed to continue unhampered. In this spirit a protocol was signed on December 8, 1986, that was aimed at solving some of the problems of Israeli agricultural exports during the transitional period of the Spanish accession. At the end of July 1987 the additional protocols of adaptation between Israel, Spain, and Portugal were initialed.
A problem which gave rise to some tension between Israel and the EC Commission was the sudden decision by the Council of Ministers to unilaterally grant the same preferences enjoyed by Israeli products entering the EC to Palestinian products originating in the territories. The decision was published on December 31, 1986; the Israeli authorities felt that the Twelve had more in mind to help the Palestinian entity evolve into a state than merely economic matters.
After months of negotiations Israel accepted the EC decision for the direct export of agricultural products from the West Bank and Gaza Strip to the EC. Subsequently the Council of Ministers approved on December 15, 1987, the signature of three additional protocols, including one on Israeli agricultural exports, which was long overdue, since it had to give Israel some defense against damages caused by the Spanish adhesion of January 1, 1986. The European Parliament, in an unprecedented move, decided on March 9, 1988, not to approve the ratification of the Protocols because of Israeli repression of the Intifada and the obstruction of Palestinian exports, which had been settled by then. This was a de facto political sanction using economic means; eventually the European Parliament ratified the three protocols on October 12, 1988.
On December 30, 1989, there was a demonstration in Jerusalem organized by the Peace Now movement. Excessive force was used by the Israeli police and on January 18, 1990, the European Parliament condemned "the brutal intervention of the Israeli police during the demonstration" and recalled a previous resolution concerning the closing down of Palestinian universities. The EP called on the Commission "to freeze immediately budget heading 7394 allocated to scientific cooperation with Israel." The EC Commission on February 7 quickly complied with this resolution and suspended the scientific cooperation; it took more than a year to restore those joint projects unilaterally brought to an end by the Commission.
Financial aid to the Palestinians started in 1982 with a small sum of 3 million ECU yearly; in the year 1991 after the Gulf War, an emergency aid of 60 millions ECU was decided upon but again the Commission made it conditional on the nomination of its representative for the distribution of this aid in the territories: a request considered by the Israelis to be political.
In a meeting which took place in Paris in June 1991 between Foreign Minister David Levy and the European "troika" a wide agreement was reached: Israel would be admitted to the European Economic Space, the Community would participate in the future Peace Conference on the Middle East, and the Commission would appoint its representative to the territories. No timetable or technical details were given and the entrance of Israel to the European Economic Space was never implemented.
[Sergio I. Minerbi]
Relations between Israel and the European Union (EU) are now formally governed by the Euro-Mediterranean Partnership, established through the EU-Israel Association Agreement and the regional dimension of the Barcelona Process.
Israel was keen on becoming a part of the Barcelona Process, initiated in 1995, between the EU and 12 Mediterranean partners. This initiative was conceived by the EU mainly with a view to the Maghreb countries. These countries, which had historical ties with France, were sending thousands of emigrants to Europe. The EU felt that raising the standard of life in the Maghreb countries and creating new jobs would bring less pressure to immigrate to the EU. The situation was radically different for Israel.
Ten years later, the achievements of the Barcelona Process are rather modest. Mediterranean countries need to create 5 million jobs a year, a target which seems impossible to attain. The EU also hoped that through the Euro-Mediterranean Partnership it would have a say in the Middle East peace process.
The major development which took place since the early 1990s in the relations between Israel and the EU has been the signature of the Association Agreement, which was signed on November 20, 1995, and replaced the earlier Cooperation Agreement of 1975. The Association Agreement went into force on June 1, 2000, following ratification by the 15 Member State Parliaments, the European Parliament, and the Knesset.
The principles outlined in the treaty were not always fully implemented. According to the treaty, regional cooperation should be encouraged, a regular political dialogue should be established, as well as a dialogue on scientific, technological, and cultural matters. The regular political dialogue has taken place on rare occasions, probably because the EU was constantly taking sides in the ongoing conflict between Israel and the Palestinians, in favor of the latter.
The situation has been rather better in the field of economic cooperation. In trade relations, the EU is Israel's major trading partner, with about 40% of Israeli imports coming from the EU and about 33% of Israeli exports directed to the EU. In the year 2004, total imports from the EU reached $16,813 million, while total exports reached $10,721 million. The figures excluding diamonds are respectively $7,611 million for the imports and $7,435 million for the exports. One could jump to the conclusion that the huge deficit of about $4 billion a year is due mainly to the trade in diamonds.
Cooperation has been the best in the field of science and technology. Israel is highly advanced in technological innovation, especially in the electronics industry and biotechnology. Many achievements in the electronics industry are due to fallout from military research.
On March 8, 1999, the Agreement for Scientific and Technical Cooperation between the European Community and Israel went into force. Thus Israel has been fully associated with the 5th Framework Programme (FP5) for Community RTD (1999–2002). Later, Israel became fully associated in the 6th Framework Programme (2002–06) as of December 16, 2002.
With the access granted to Israel to the Framework Programme for Community RTD, the financial flow was reversed. Instead of the about $20 million a year received by Israeli bodies from the EU, $36.6 million were paid by Israel as its participation fee. Israel's share is calculated on the basis of the percentage of its GNP compared to the total GNP of all contributing countries. Israel's status of "Associated Country" requires financial participation in the FP budget, which reached Euro 150 million for FP5 and Euro 192 million for FP6. In return Israeli organizations, which take part in selected joint EU-Israel projects, can receive a financial contribution from the Commission consisting of the reimbursement of some of the costs incurred. The Israeli contributions are very substantial in comparison with the total expenditure of the Israeli government in support of industrial-scientific research.
The main advantage of working with European bodies is to share risks and costs. On the other hand, about 40 percent of the groups working in the framework program do not envisage any product at all. In September 2003, there were 623 joint research projects associating Israeli groups to the FP5; out of them, 143 were under Israeli coordination. Total estimated European funds to Israeli research reached Euro 163 million in FP5.
At the end of September 2000, the Palestinians started a new Intifada. Five years later, in September 2005, the Palestinians counted more than 3,000 victims, while the Israelis lost more than 1,000 people, mainly civilians. The Palestinians perpetrated many terrorist actions, but obtained no political results, notwithstanding the support they received from the EU.
On April 30, 2003, the U.S. State Department released the text of the "roadmap" to a permanent solution to the Israeli-Palestinian conflict. The roadmap specifies the steps for the two parties to take to reach a settlement, and a timeline for doing so, under the auspices of the Quartet – the United States, the European Union, the United Nations, and Russia.
On June 4, 2003, a meeting took place at Aqaba, with President George Bush, King Abdullah of Jordan, Israeli Prime Minister Ariel Sharon, and Palestinian Prime Minister Mahmoud Abbas. In his statement Prime Minister Ariel Sharon referred to the possibility of establishing a Palestinian state within temporary borders, if the conditions for this were met. The Palestinian state will, inter alia, be completely demilitarized. This state will be the home of the Palestinian diaspora; no Palestinian refugees will be permitted to enter the territory of the State of Israel.
On May 1, 2004, the EU was enlarged to 25 Member States and established a new "European Neighborhood Policy" designed to offer its neighbors greater political, security, economic, and cultural cooperation. Policy negotiations with partner countries are meant to bring upon an agreed Action Plan.
On the political level, the discrepancies between the European stand and Israeli policy were most intense during the year 2004 and, sometimes, Israel felt that the Europeans went further than criticizing a policy, but were casting doubt on the legitimacy of the existence of the State of Israel. The European Council of March 25–6, 2004 declared:
In July 2004, Javier Solana, the chief representative for foreign policy and security of EU, met Prime Minister Ariel Sharon, who said: "Israel is interested in integrating the international community, mainly Europe, in the peace process with the Palestinians, but without a radical modification of the European stand, mainly regarding the security of Israel and its need of defending itself, it will be very difficult to do so." Solana said on this occasion: "The EU has a role in Middle East peace talks, like it or not."
The EU asked Israel to dismantle its security fence, to freeze the settlements in the territories, to stop extrajudicial executions ("targeted killings"), to guarantee human rights and better living conditions for the Palestinians.
The EU is one of the main contributors of financial aid to the Palestinian Authority and Israel has expressed doubts that a part of its disbursement is not being used for terrorist activities. The European Anti-Fraud Office, OLAF, made an investigation, but did not find enough proof to substantiate the accusation, while at the same time it did not exclude the possibility altogether.
Among the possible causes of the negative stand taken by the EU the following may be indicated: the success of Palestinian propaganda depicting Israel as a demon comparable to the Nazis; the success of the Intifada in influencing public opinion, especially through television; the enormous economic interests of most of the European countries in the Arab countries and their desire to go on selling them huge quantities of arms.
After the death of Yasser Arafat, chairman of the PLO, in November 2004, a new Palestinian leadership agreed to and implemented a kind of truce. Israel, for its part, decided uni-laterally to dismantle all 21 of its settlements in the Gaza Strip (*Gush Katif) and from four more settlements in northern
The Action Plan with Israel was concluded on December 13, 2004. It allows the possibility for Israel to participate progressively in key aspects of EU policies and programs, to upgrade the scope and intensity of political cooperation, to encourage Israeli legislation as a means to open the EU internal market to Israel, and to achieve greater liberalization of trade, services, and agriculture. The Action Plan identifies, inter alia, as priorities cooperation in the Middle East conflict and other areas, counter-terrorism, non-proliferation of weapons of mass destruction, human rights, improved dialogue between cultures and religions, migration issues, the fight against organized crime and human trafficking and police and judicial cooperation, transport, energy, environment, science and technology, and people-to-people contacts.
On September 15, 2005, Israeli Foreign Minister Silvan Shalom met in New York with Benita Ferrero-Waldner, the European Commissioner for External Relations and European Neighborhood Policy. She said:
The Israeli authorities have been very satisfied with the new Action Plan, which extends cooperation to new fields. But it is doubtful that the Israelis really understand that this increased cooperation has a price: to accept the involvement of the EU in the peace process with the Palestinians. Vice Prime Minister Shimon Peres said that eventually a larger Europe will incorporate the Middle East. Then, Israel will certainly ask to be included in the economic network of Europe.
Main Agreements between Israel and the EEC
4 June 1964 Commercial Agreement
29 June 1970 (Preferential) Agreement
11 May 1975 Agreement (Industrial Free Trade Area); Kitvei Amana, n. 882.
8 February 1977 Additional Protocol to the Agreement (on Scientific Cooperation); Kitvei Amana, n. 924.
18 March 1981 Second Additional Protocol to the Agreement (relating to Greece); Kitvei Amana, n. 965.
24 June 1983 Second Financial Protocol, Kitvei Amana, n. 966.
18 December 1984 Third Additional Protocol to the Agreement, Kitvei Amana, n. 986.
15 December 1987 Fourth Additional Agreement to the Agreement (relating to Portugal and Spain), Official Journal of the European Communities, L 327 of 30.11.1988.
15 December 1987 Third Financial Protocol, Ibidem.
20 November 1995 Signature of the Association Agreement
1 June 2000 The Association Agreement entered into force
8 March 1999 Agreement for Scientific and Technical Co-operation between the EC and Israel, entered into force
16 December 2002 Israel associated to the 6th Framework Programme
13 December 2004 Action Plan with Israel concluded
[Sergio I. Minerbi (2nd ed.)]
Source: Encyclopaedia Judaica. © 2008 The Gale Group. All Rights Reserved.