Israel condemns EU ban on funds for settlements

Israeli prime minister Binyamin Netanyahu has reacted angrily to a new European Union decree which conditions all future co-operation agreements with Israel on a directive that they not include Israeli settlements.

The measure, which comes into effect on Friday, bans any EU funding or co-operation with Jewish communities in the West Bank and east Jerusalem, captured from Jordan in the 1967 Six- Day War, and the Golan Heights, seized from Syria in the same conflict.

European dictates rejected
Mr Netanyahu, after holding emergency consultations with senior ministers, declared that Israel would not accept European dictates concerning its borders. "We will not follow any demands regarding our borders. These issues will be resolved only through direct negotiations."

He also vowed that the government would stand by the hundreds of thousands of settlers.

The EU has always maintained a policy that Israeli settlements are illegal under international law, but until now has worked with Israel based on quiet understandings that the EU agreements cover only pre-1967 Israel. “Now this has become a formal, binding policy,” a senior Israeli official said, describing the move as “an earthquake”.

The EU is Israel’s biggest trading partner, with total trade amounting to €29.4 billion in 2011. More than a third of Israeli imports come from EU states and the bloc purchases more than a quarter of Israeli exports.

Charge d’affaires of the EU delegation to Israel, Sandra De Waele, said the decree did not represent a new policy but meant that for the first time any agreement signed between the EU and Israel would have to contain a clause excluding settlements. She acknowledged that the move reflected ongoing European displeasure over Israeli settlement activity.

“It cannot be denied that maybe there is a growing sense of frustration in Europe, not so much with the dialogue in the peace process, it may be more with the continued settlement construction and maybe that filters down to these kind of political positions that have been taken.”

Mr Netanyahu, however, suggested the EU deal with more pressing regional matters, such as the Syrian civil war or Iran’s “race towards nuclear arms”.

Palestinians reacted positively to the decree. Palestinian Liberation Organisation executive committee member Hanan Ashrawi said the move would increase the likelihood of peace in the region.