EU Differentiation and Israeli settlements

ECFR experts explain the EU’s nascent differentiation policy towards Israel and its settlements in the following two video presentations. 

Differentiating between Israel and its settlement activities within the EU’s bilateral relations is one of most powerful tools at the EU’s disposal for challenging the incentive structure that underpins Israeli support for the status quo in the Occupied Palestinian Territories (OPTs). Deepening the EU’s nascent differentiation policy can have significant implications on the incentive structure that underpins the Israeli public’s support for the status quo and continued occupation.

ECFR’s recent report on “EU differentiation and Israeli settlements” makes the case for why differentiation is unavoidable for the EU, how it can be messaged and developed, and suggests areas for exploring a more coherent and consistent implementation of this policy, some of which could be quite significant given the undifferentiated nature of Israel’s economic and financial sectors. This could be most impactful when it comes to Israeli banks which conduct daily business with their European counterparts, and at the same time provide loans and financing to Israeli businesses and individuals living and operating in the territories.

But at the same time, the EU and its member states must go further in owning, messaging and most importantly broadening its application of differentiating between Israel and the settlements at every level of the EU-Israel relationship. They must also do a better job of pushing back against Israeli attempts to conflate differentiation with the Boycott, Divestment, and Sanctions (BDS) movement and anti-Semitism, with a view to intimidating, slandering, and discrediting Europeans.


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ECFR’s MENA Director Daniel Levy outlined the EU’s nascent differentiation policy towards Israel and its settlements during a discussion organised by the Swedish Institute of International Affairs (UI), arguing that because of the density of European-Israeli economic integration and interaction, and because this is one area where Europe does have a detailed policy developed over several decades, there is actually a degree of European capacity to impact and have leverage over Israel’s cost/benefit calculations.

ECFR’s Israel/Palestine Project Coordinator Hugh Lovatt briefed delegates from the UN, the Organization of Islamic Cooperation, and the League of Arab States, on EU policy towards Israeli settlements and possible ways forward. As he explained, the more that differentiation builds up its own momentum, the more its logic will require further action, and the more this will be able to impact Israeli calculations towards continuing the occupation, and start gnawing away at the sense of impunity with which it operates in the OPTs. 

The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of their individual authors.

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