Israel fears withdrawal by EU firms is too high a price to pay

Divestment resulting from deadlock with the Palestinians is a hot political issue

Jerusalem

Fears are growing in Israel that recent divestment steps by individual European firms could mushroom into a trend that harms the Jewish state’s economy – and ends up pinching the pocket of the Israeli consumer.

The steps from firms within the European Union – which is Israel’s largest trading partner – have most recently included the Dutch pension fund PGGM divesting from five Israeli banks which are involved in construction in settlements in the occupied West Bank, and Dutch and Italian infrastructure firms pulling out of tenders for expanding Israeli ports.

Concerns regarding the European policies were voiced during a visit to Brussels on Wednesday by the Israeli  Economics Minister Naftali Bennet, who addressed an EU conference on encouraging small businesses in the Mediterranean basin and met EU leaders before heading to London, where he was due to meet with leaders of the Jewish community.

Both the left and right have focused attention on the handful of divestments, the left in the hope that fears of a full-scale boycott will muster pressure on the government to stop building at the settlements and reach a deal with Palestinian President Mahmoud Abbas ending the 47 year old occupation.

For the right, the steps fit in with the view that the whole world is against Israel, is perhaps anti- Semitic, and that a hard line approach is necessary to withstand the pressure and defend Israeli interests.

Construction works are continued for a new housing unit in the east Jerusalem neighbourhood of Har Homa, Israel Construction works are continued for a new housing unit in the east Jerusalem neighbourhood of Har Homa, Israel (EPA) It was only a week ago that Mr Bennet, wearing his hat as leader of the far-right Jewish Home party, led a walk-out of an address to the Knesset, the Israeli parliament, by the German President of the European parliament, Martin Shultz, after the latter began raising criticisms of Israeli policies in the West Bank and towards the Gaza Strip.

Mr Shultz also told the Knesset that the EU would always stand by Israel’s side and touched on the importance of remembering the Holocaust.

But Israeli media reports of his speech focused mainly on his recollection of a young Palestinian who had asked him why an Israeli person can use seventy cubic litres of water daily and a Palestinian person only seventeen.

“I haven’t checked the data, I’m asking you if its correct,” he said.

Mr Bennet, who advocates annexing most of the West Bank to Israel, could not resist playing the Nazi card as he reacted in a subsequent post on Facebook. “I will not  tolerate duplicitous propaganda against Israel in the Knesset – especially in German,” he wrote.

But the Finance Minister, Yair Lapid, from the centrist Yesh Atid party, is pulling in a different direction than Mr Bennet. Mr Lapid said in a speech on Sunday that diplomatic stalemate with the Palestinians “endangers us because it causes mounting damage in our relations with the US and the world”.

A Palestinian construction worker at a building site in the Jewish settlement of Ramt Shlomo, near the Arab neighborhood of Beit Hanina, East Jerusalem A Palestinian construction worker at a building site in the Jewish settlement of Ramt Shlomo, near the Arab neighborhood of Beit Hanina, East Jerusalem (EPA) He indicated the divestment situation could get worse if the peace talks with the Palestinians fail.

“I will not detail here the type of sanctions Israel could face but the results are liable to be nothing less than destructive to the private welfare of each Israeli citizen,” Mr Lapid said.

Alon Liel, a former director-general of the foreign ministry known for his dovish views, added: “The new Israeli society is very standard-of-living oriented and even if there is a marginal impact of 5 or 10  per cent on people, a lot of Israelis are not willing to pay the price. Today’s youngsters don’t want Europe to hit them in the pocket.”

The Israeli government believes that the EU policies and rhetoric are contributing to a climate in which individual firms in Europe may divest. In particular, they cite the advancement of new guidelines in the EU’s Horizon 2020  science research program agreed in November that bar funding to entities in the occupied territories.

Foreign ministry spokesman Yigal Palmor also criticised EU advocacy of labelling products that originate on settlements. “This is a completely biased singling out. There should have been a universal regulation on products from conflict zones to Europe. The proposed regulation is anything but universal.’’

“Our concern is that the EU is creating a negative atmosphere and is sending the wrong message and so will deter people from doing business in places the EU wants to encourage,” Mr Palmor said.

“On the one hand the EU speaks of enhancing partnership and on the other it seriously encourages discrimination [against Israel]. Will the real EU stand up?”

A European diplomat, who spoke on the condition of anonymity, responded: “The guidelines were an enforcement of existing practice. Yes, we apply a different policy to products over the Green Line (the old border between Israel and the West Bank), but goods are traded.

“Professors at the Hebrew University who live in settlements participate in EU programmes. We are not encouraging a process of boycott,” he added.

The diplomat went on to say that a failure of the current peace mediation efforts by United States Secretary of State John Kerry “will have consequences for our relations with both parties, Israeli and Palestinian”.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Life and Style
A still from a scene cut from The Interview showing North Korean leader Kim Jong-un's death.
tech
Voices
'That's the legal bit done. Now on to the ceremony!'
voicesThe fight for marriage equality isn't over yet, says Siobhan Fenton
Life and Style
Approaching sale shopping in a smart way means that you’ll get the most out of your money
life + styleSales shopping tips and tricks from the experts
Arts and Entertainment
Bianca Miller and Katie Bulmer-Cooke are scrutinised by Lord Sugar's aide Nick Hewer on The Apprentice final
tvBut Bianca Miller has taken on board his comments over pricing
News
in picturesWounded and mangy husky puppy rescued from dump
News
newsAstonishing moment a kangaroo takes down a drone
Life and Style
Duchess of Cambridge standswith officials outside of the former wartime spy centre in Bletchley Park
tech
News
people
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: IT Support Technician - 12 Month Fixed Term - Shrewsbury

£17000 - £20000 per annum: Ashdown Group: IT Helpdesk Support Technician - 12 ...

The Jenrick Group: Maintenance Planner

£28000 - £32000 per annum + pension + holidays: The Jenrick Group: Maintenance...

The Jenrick Group: World Wide PLC Service Engineer

£30000 - £38000 per annum + pesion + holidays: The Jenrick Group: World Wide S...

The Jenrick Group: Project Manager

£35000 per annum + Pension+Bupa: The Jenrick Group: We are recruiting for an e...

Day In a Page

Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'