The European Union said on Tuesday it will bar financial assistance to Israeli organisations operating in the occupied territories, underlining its concern that Israeli settlement-building harms prospects for peace with the Palestinians.
Guidelines adopted by the EU’s executive Commission in late June and expected to be published this week make clear that, from next year, Israeli “entities” operating in the territories will not be eligible for EU grants, prizes or loans.
The measure will apply to Israeli companies, universities or other bodies operating in areas occupied by Israel since the 1967 Middle East War, including the Golan Heights, the West Bank and East Jerusalem.
“The EU has made it clear that it will not recognize any changes to pre-1967 borders, other than those agreed by the parties to the Middle East Peace Process,” a copy of the guidelines seen by Reuters said.
The decision could make it politically difficult for the Jewish state’s pro-settlement government, which has called those narrow boundaries indefensible, to sign accords with the 28-nation EU.
Israeli Prime Minister Benjamin Netanyahu criticised the EU, saying it instead should focus on “problems that are slightly more urgent in the region, like the civil war in Syria, or Iran’s race to obtain a nuclear weapon”.
“We will not accept any external dictates regarding our borders. This issue will be determined only in direct negotiation between the sides,” Netanyahu said in broadcast remarks.
Palestinians praised the rule as a concrete step against settlement construction they fear will deny them a viable state. Israeli cabinet ministers condemned the move.
Sandra de Waele, the EU delegation to Israel’s head of political affairs, said on Israel Radio the guidelines codified EU policy that “agreements and financial instruments that benefit Israel” should not apply to activities or entities in territory it captured in the 1967 war.
The EU decision was an expression of “frustration with continued settlement expansion,” she added.