Aid, Policy and Conflict: shifting the EU impact in Israel/Palestine

Aid, Policy and Conflict: shifting the EU impact in Israel/Palestine

When tension rises and violence expands in Israel and Palestine, the question of the European Union’s possibilities of action is raised. Through communiqués and declarations, the Europeans send out an image of a powerless actor unable to influence the current landscape of the Israeli-Palestinian conflict. Yet the EU is a key player in the region, notably through the international aid it allocates to the Palestinians and the commercial partnerships it has forged with Israel. In such a position, the EU should weigh in, using its assets both in favour of a two-state solution and the creation of a sovereign Palestinian state, as well as against Israel’s violations of International Law.

What is the history of European action and aid in the Palestinian Territories?

According to the OECD database, from 2012 to 2016, 45% of the total funds spent on the Palestinian Territories came from European donors (Wildeman, 2018). Having adopted a direct state-building role towards the Palestinian Authority since the Oslo Accords, the EU is trying to position itself as a central link in the completion of a two-state solution, connecting its efforts in conflict resolution to substantial development assistance. While the European Community’s first financial assistance to the Palestinians dates back to 1971, and the European Council’s 1980 Venice Declaration recognises the Palestinians’ “legitimate rights” to existence and security (Muzu, 2010), since the signing of the Oslo Accords in 1993, the EU has been committed to financially supporting the peace process (Al-Fattal, 2010). In the framework of the Euro-Mediterranean Partnership (Barcelona Process) born in 1995, the post of EU Special Representative in the Middle East was created in November 1996 to give a presence, visibility and political impetus in the region to the EU’s efforts to contribute to a settlement of the Israeli-Palestinian conflict (Al-Fattal, 2010).

These post-Oslo developments were accompanied by declarations setting out the EU’s policy towards the Israeli-Palestinian conflict. The Berlin Declaration of March 1999 affirmed the desire for the establishment of a democratic, viable, peaceful and sovereign Palestinian state alongside Israel, a settlement of the situation in Jerusalem and a just and agreed solution to the Palestinian refugee question. These positions were complemented by the 2002 Seville Declaration, in which the EU stressed that the 1967 borders proposed by the UN (symbolised by the Green Line) should be the basis for a final Israeli-Palestinian settlement (Bouris, 2014). In line with these statements, the EU is trying to be involved in the negotiations beyond its economic role, as in the Sharm el-Sheikh II meeting in October 2000, trying to limit the violence at the time of the second intifada. In the same vein, the EU participates in the Middle East Quartet, created in June 2002. With the European Security and Defence Policy, the creation of EUPOL COPPS at the end of 2005 was allowed, a mission to support the reform of the Palestinian security sector (Al-Fattal, 2010).

Since then, with the exception of the period of Hamas rule of the Palestinian Authority, the EU’s political position towards the Israeli-Palestinian conflict has not significantly changed. The EU is positioning itself as the warden of the two-state solution and the Oslo agreements, denouncing both the authoritarian excesses of the Palestinian Authority and the violations of international law by the Israelis, including its settlement policy. Beyond funding to the Palestinian Authority, the EU also assists projects in East Jerusalem to support the Palestinian community and public institutions in the city, and to preserve its Arab cultural heritage. The vast majority of EU aid is channelled through the European Neighbourhood Policy Instrument (ENPI), which has been providing aid to states around the Mediterranean since 2008. Of the 16 countries included in the Southern Partnership, the Palestinian Territories currently receive between 15 and 20% of the funds spent, making them the main recipients of this aid, along with Morocco.

But if the EU’s aid toward the Palestinians is articulated by the Joint European Strategy in Support of Palestine, the situation of failure in which the peace process finds itself more than 25 years after the Oslo agreements – and the difficult economic conditions for the Palestinians- illustrate the limits of European action. Many non-governmental organisations (Oxfam, 2007), criticise the action – or inaction – of European donors, who, by contributing to a prejudicial status quo, are partly ethically responsible for the current situation. As an actor with substantial financial and political weight, the European Union has encountered several limits in the implementation of its aid to the Palestinian Territories, and in particular in the way it is linked to the policy conducted regarding the conflict.

Anatomy of a failure, European conditioning against the tide?

Aid as an obstacle to the reunification of Palestinian factions: Officially, European aid to the Palestinian Authority is untied – not directly conditioned – in order to allow greater efficiency. However, from a political point of view, this support implies the validation of guarantees by the Palestinian Authority. It is thus placed within the framework of the Quartet and its demands, requiring the commitment of the Palestinian government to the principle of non-violence, the recognition of Israel and the acceptance of existing agreements and obligations, including security cooperation with the Israeli services (Hinnebusch, 2003). This conditionality deliberately favours moderate Palestinian actors, potential “partners for peace”, while side-lining Hamas. In the context of the 2006 elections won by Hamas, the demands made led the EU to participate in the international boycott of the Hamas-led government of the Palestinian Authority. Such a move also made it more difficult for the Palestinians to achieve a political reconciliation between the main factions, essential in negotiating a two-state solution with a sole legitimate actor representing all the Palestinians. The collapse of the national unity government and the war in Gaza, leading to the situation of territorial division that persists to this day, were partly caused by this inability of the Palestinian factions to agree on the demands of the international community and the EU. By fuelling the internal Palestinian split, by participating in setting preconditions for inter-Palestinian negotiations, the EU is directly sacrificing its objectives of resolving the Israeli-Palestinian conflict. At the same time, it considers the current ruling actors within the Palestinian Authority as the only credible ones to achieve the objective of a two-state solution (EU Commission Insider, 2020), a position that does not allow for any progress towards unblocking the current situation.

A Helpless Aid in the Face of Violations of International Law from Israel: The EU’s practical inability to link its aid or partnerships to strong demands is also reflected in the EU’s relations with Israel. The latter, through its continuous policy of occupation and settlement, violates international law and contradicts the Oslo agreements it has signed. Through the recurrent destruction of infrastructure built by development and humanitarian actors, often financed by the European Union itself, Israel contribute to the destruction of the possibility of a two-state solution and to prevent Palestinian economic development (Shikaki, 2019). While the EU has repeatedly insisted that all settlement activity is illegal under international law, endangers the two-state solution and undermines the prospects for a lasting peace, it is abundantly clear that it will not punish Israel or deny it the benefits it offers through their agreements. Despite Israel’s behaviour, the EU has signed more than a dozen bilateral agreements with Israel, complementing the comprehensive association agreement signed in 1995, in areas such as police cooperation (2018), development (2018), aviation (2013) and agriculture (2012). The EU is Israel’s largest trading partner, accounting for a third of its total exports. And while most agreements are conditional on respect for “common values”, including respect for human rights and international humanitarian law or fundamental freedoms, Israel’s repeated violations of some of these values have not led the EU to suspend these agreements as it has the right to do (Dajani and Lovatt, 2017). As a result, the EU is contributing to an Israeli sense of impunity for the occupation, preventing the establishment of safeguards that would allow Israel to continue its occupation.

The EU’s weakness towards the attitudes of its allies and the political under-utilisation of its foreign aid and partnerships, whether for the Palestinian Authority or Israel, clearly limits its weight in the political resolution of the conflict. While this weakness is multifactorial and can be explained by the links forged between the EU and these different actors, it is also justified internally by the functioning of a multilateral organisation that has to deal with divergent opinions, and does not favour taking a clear-cut position.

The EU, between the complex construction of its policy and divergent national positions.

Many of the 27 EU Member States have different histories, cultures and foreign policy objectives in the Middle East. When dealing with an issue as divisive as the Israeli-Palestinian conflict, agreeing on a common position that would allow the economic weight of aid to be used to carry political weight can seem complex. Thus, while the majority of EU members share a set of convictions in favour of a two-state solution, defining “a strategy to make it happen” and agreeing on the steps to be taken seems much more complex. Chris Patten, European Commissioner for External Relations from 1999 to 2004, explained that “it is easier to go from A to Z than from A to B.” (Le More, 2010). This problem can be highlighted beyond the issue of the peace process and reflects the complex institutional structure of the EU. For example, almost all decisions regarding the EU’s Common Security and Defence Policy have to be taken unanimously. Within this framework, the EU High Representative for Foreign Affairs and Security Policy is supposed to bring the European states together on various aspects of their external action. However, although the High Representative represents them within the Quartet, this role remains institutionally weak and incapable of completely replacing the states in international negotiations on the Israeli-Palestinian conflict.

With regard to relations with Israel and Palestine, the differences in positions between EU states are clearly visible and explains the lack of political will to use politically European aid. As example, Ireland appears to be the most active in criticising Israel today, relying on the numerous studies creating parallels between its relations with Northern Ireland and the situation between Israel and the Palestinian Territories (The Economist, 2017). On another side, France appears to be the country most committed to international peace efforts today, while conversely Hungary is the state that is most energetic in blocking joint EU statements criticising Israel. These divisions between EU member states, combined with other factors, negatively affect the European willingness and ability to take action towards Israel or towards a Palestinian reconciliation. These are fostered by the Israeli government’s active policies to drive a wedge between EU member states, undermine EU unity on the issue and paralyse European decision-making (Asseburg and Goren, 2017). As an example, Israeli Prime Minister Benyamin Netanyahu’s relations with the illiberal governments of Central and Eastern Europe contribute to this fragmentation. Similarly, the Holocaust and the history of antisemitism in Europe make many EU member states, most notably Germany, uncomfortable toward any position criticising Israeli policies, which Netanyahu plays on by equating any opposition to his policies with antisemitic posturing (Cypel, 2020).

What role for Europeans in Israel and the Palestinian Territories?

The need for European unity to act in the face of repeated Israeli violations of international law and to seize the political dividends of development aid to the Palestinian Territories seems impossible to achieve in the current context. However, a minimum consensus might be sufficient for the EU to be more present at the diplomatic level and to assert a credible position at the international level. In the same way that the EU was able to react very quickly to condemn the “Deal of the Century” peace plan proposed by Donald Trump at the beginning of 2020, several actions and evolutions in the EU’s positions are possible. They are a current necessity for Europeans, in order to really take action and revive the two-state solution.

Thus, the alignment of European positions with international law, notably by demanding that Israel respect its obligations as an occupying power with regard to International Humanitarian Law is a first essential step to be taken. Associating these demands with real threats of triggering procedures for suspending or reviewing existing trade agreements could already put a new pressure on Israel, without leading to an internal revolution in the EU. Similarly, adopting tougher guidelines at the European level to prohibit linkage between public funds and Israeli settlement-linked activities or entities would be a strong signal.  Expelling those from the commercial partnership agreements would also be in line with the current EU position, translating into acts the condemnations already issued. For the Union itself, unlocking such a capacity could prove promising in terms of foreign policy, giving it the means to realise its new desire to carry more weight at the geopolitical level, as well as fostering it credibility toward foreign actors, an asset in any political or commercial negotiation.

With regard to the Palestinians, the tightening of the conditions for the allocation of international aid to the Palestinian Authority would help placing more pressure on it toward the fulfilment of democratic perquisites, including the holding of elections. At the same time, a refocus of its aid on sovereignty building and on strengthening civil society movements would help foster the aid’s political effectiveness. Meanwhile, the opening of channels for discussions and negotiation with Hamas would be a major step towards Palestinian reconciliation, as well as acknowledging that ending violence could be done only by welcoming all actors of the conflict to the same table. These options, which have been regularly proposed for several years (Witney, 2014), would also help to strengthen the EU’s image and credibility in its stated objectives of respecting human rights and promoting democracy. By pushing toward a Palestinian political renewal, the EU would help fulfilling a prerequisite for a potential resolution of the conflict. At the heart of a period of tension such as the current one, those measures would also allow the EU to be placed at the heart of the political discussions in the region, allowing it to financially and politically deter the different actors’ warmongering.

Finally, beyond the Union, it is also the responsibility of its Member States, and first and foremost France and Germany, to take the measure of the situation and leverage their international weight to act and to make a real plea for a new direction. Free from the multilateral constraints inherent to the EU, they are able both to react faster and enact more ambitious foreign policies, inciting the EU to follow the direction that would be taken. But while the tools and the options are now on the table, the political willingness to use them and to take significant steps on such a polarizing issue in the states’ public opinions remains to be proven.


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Victor Lachenait is a dual-Master student in International affairs at the Johns Hopkins School of Advanced and International Studies and Sciences Po Lille. Specialising in conflict prevention and peacebuilding, he has experience working with International Organisations and NGOs, including the United Nations. Focussing on the Middle East, he speaks English, French and Arabic.