"Reuters" reports that the European Union is considering sanctions against Israeli banks. Having decided to push ahead with labelling Israeli goods made in settlements in the West Bank, there are proposals to go much further, including targeting Israeli banks, reports "Reuters."
Reuters" quotes a paper to be published today by the European Council on Foreign Relations, which claims that the EU is in breach of its own laws and must move much more firmly to distinguish its dealings with Israel from Israel's activities in the West Bank and East Jerusalem, which it has occupied since the Six Day War in 1967.
"Reuters" adds that European diplomats see labelling as only the first step the EU could take against Israel over its settlements policy, and that in financial terms it is expected to have a relatively minor impact on the Israeli economy.
However, the new proposals would go much deeper and further, reaching into banking, loans and mortgages, qualifications earned in settlement institutions and the tax-exempt status of European charities that deal with Israeli settlements.
The report entitled, "EU Differentiation and Israeli Settlements," says, "Under its own regulations and principles, Europe cannot legally escape from its duty to differentiate between Israel and its activities in the occupied Palestinian territories."
"Reuters" reports that the authors argue that by pushing much further to separate the EU's dealings with Israel from the settlements, it will force Israel to decide what sort of relationship it wants with Europe and in turn encourage it to return to talks with the Palestinians on a two-state solution to the conflict.
The most significant proposal is on banking, where large Israeli institutions have daily dealings with major European banks, while also providing loans and financing to Israeli businesses and individuals based in the settlements. Under European Commission guidelines from 2013, EU- and member-state-funded lending cannot be provided to Israeli entities operating in the occupied territories. With the British government holding a controlling stake in some banks following the financial crisis, observes "Reuters" that would in theory prevent those banks providing financing to Israeli counterparts that have dealings in the settlements.
Israel's Foreign Ministry said, "This report was made by a European research institute and not the EU. We do not comment on research institute papers."
Published by Globes [online], Israel business news - www.globes-online.com - on July 22, 2015
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