How Israel-EU relations have been impacted by Germany’s Council presidency

The opening point seemed rather grim. The past decade includes the linkage policy by the EU, conditioning in 2008-09 the upgrading to a new action plan with Israel to an advancement in the Israeli-Palestinian peace process.

Another blow came in 2013, after the EU introduced the differentiation policy, explicitly excluding the occupied territories beyond the 1967 lines from all Israel-EU agreements. Since then, no Association Council convened (first due to Israel, but due to the EU since 2014). Labeling products from settlements came next.

The Israeli government marked July 1, the first day of Germany’s presidency, as the date it can begin annexation of territories in the West Bank. During the first half of 2020, the EU and about half of its member states, including Germany, were conducting a diplomatic offensive against Israel to deter any annexation.

Some member states, excluding Germany, even threatened Israel that the annexation would result in punitive “sticks,” ordering the European External Action Service (EEAS) to prepare a list of possible measures against Israel. While Germany warned Israel about the ramifications of annexation, the Israeli government relied on Germany (and others) to block the more severe measures against Israel.

The turn started on August 13, when Prime Minister Benjamin Netanyahu announced the postponement of annexation for singing a peace accord with the United Arab Emirates (UAE).

This turnover from annexation to normalization surprised the EU. Netanyahu’s remarks in the Israeli media that the annexation was not canceled but rather postponed kept the EU’s suspicion toward Netanyahu’s government in place. And indeed, in November, before Biden’s inauguration, the Israeli government announced that it would advance the construction of 1,257 housing units in controversial Givat Hamatos in south Jerusalem. The EU considers such construction as de facto annexation that will prevent a territorial continuum between east Jerusalem and Bethlehem for a future Palestinian state.

Most Israelis view the EU as a foe, not a friend, critical toward Israel and siding with the Palestinians. These political disagreements reach the headlines and receive most of Israeli public attention, overshadowing the extensive cooperation with the EU.

Knowledgeable Israeli representatives are aware that in many areas the EU is of great strategic importance to Israel as its most important trading partner, the biggest external source of funding to Israeli research and innovation, most significant in foreign direct investments, and that it greatly contributes to Israel’s higher education, tourism, agriculture, culture and overall economic growth. However, for the relationship to be upgraded, the official bilateral high-level dialogue should resume.

Heading the Council of the EU gives the presidency a very modest influence, such as the power to set the meetings’ agenda. It is expected to be an honest mediator between the member states, to reach agreements and forward resolutions. The Treaty of Lisbon ratified in 2009 reduced the presidency’s importance over the Foreign Affairs Council (FAC), giving the chairmanship to the EU high representative for foreign affairs and security policy (currently Josep Borrell), and it is the EEAS that sets the FAC’s agenda.

GERMANY HAS a leading position in the EU and a great deal of influence over it, but despite its honest efforts, it ran into the EU’s structural limitation, unable to overcome the politically difficult Israel-EU relationship. The EU foreign policy decision-making process requires a consensus among all member states. Any state can veto a proposition, and all states are equal. A vote by small member states, such as Luxembourg or Ireland, is equal to Germany’s.

The special relationship between Israel and Germany was further strengthened by the warm relationship forged between German Foreign Minister Heiko Maas and his Israeli counterpart, Gabi Ashkenazi. Germany did a great service to Israel by inviting Ashkenazi to an informal meeting of the EU’s foreign ministers (known as a Gymnich meeting). Ashkenazi was the only non-EU foreign minister invited to the summit. He developed good relations with other foreign ministers, including Borrell. 

These good personal relationships, together with actions taken before and after the summit, had a positive influence on the tone of the relationship between Israel and Europe and with the EU. Nevertheless, this did not translate into a formal decision by the FAC to resume the Association Council meetings with Israel or opening the possibility of upgrading the relationship. Still Israel’s Foreign Ministry deserves all the credit for attempting and partially succeeding to reverse the negative political tensions with the EU and to establish more positive relations.

The FAC always has a busy schedule, and it is difficult to put a topic that isn’t burning on the agenda, let alone a subject lacking consensus. Ashkenazi’s participation in the informal summit on August 27-28 was held only two weeks after Israel and the UAE announced their normalization agreement. Even the later normalization with Bahrain, Sudan and Morocco did not change the EU’s policy toward Israel. 

Among other things, the fact that Ashkenazi (and Defense Minister Benny Gantz) were kept in the dark regarding the talks with the UAE made it much more difficult for the Foreign Ministry to utilize the historic achievement into further diplomatic achievements on the European front. The EU is a tough nut to crack, cumbersome and slow to change, adhering to its goal to advance the Israeli-Palestinian peace process.

The presidency passed to Portugal on January 1, and will transfer to Slovenia in July. Ashkenazi already asked Portugal to act in favor of reconvening the Association Council meetings with no preconditions. He said, “We identify a real need to adopt a new approach and model for cooperation between Israel and the EU institutions and we are convinced that Portugal [in its presidency] will act to do so.” 

The ball is in Portugal’s court. Yet, bearing in mind Israel is entering another election, a real change between Israel and the EU is not expected to happen before the second half of 2021. As things stand today, the almost complete erase of the Israeli peace camp from the electoral landscape makes it unlikely that the next Israeli government will bring good news in this context, even toward the end of Portugal’s presidency.

In recent weeks, the EU passed its largest-ever budget of €1.8 trillion for 2021-2027. It intends to help the EU market recover faster from the pandemic-related economic crisis. The budget might entail new opportunities for Israel that are not yet clear, but various government ministries in Israel are working on mapping them out. The Israeli government could find itself in a better position to take advantage of those opportunities if it continues the positive trend toward the EU that Ashkenazi initiated and expands it into a comprehensive government policy.