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Leading European thinktank increases pressure on Israeli banks over occupation

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The European Council on Foreign Relations (ECFR), a major European thinktankissued a new policy brief this week titled “EU differentiation and Israeli Settlements”(pdf), stating that the “Israeli matrix of control inside the OPT [occupied Palestinian territories]” cannot be included as part of bilateral EU–Israel ties. The brief goes on to say the EU and its member states have a “legal requirement to comply” with EU policy to differentiate between Israel and the occupied Palestinian territories in all bilateral transactions with Israel. This would include daily financial transactions and greatly impact Israel’s banking industry — which could ultimately threaten Israel’s economy, and lead to an “economic tsunami” of radical proportions.

Referencing the European Commission guidelines from 2013, the report states “differentiation” should be officially named, recognized and referenced “as a fully-fledged policy” in “official statements issued at the senior political level” and specifies that transactions between European states and financial institutions are obligated, based on international law, to adhere to policies of differentiation in their daily dealings with Israeli banks, businesses, and individuals regarding all settlement transactions.

Placing emphasis on the banking system, Reuters reports “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.”

With the British government holding a controlling stake in some banks following the financial crisis, that would in theory prevent those banks providing financing to Israeli counterparts that have dealings in the settlements.

The issue extends into loans and mortgages. An Israeli with dual European citizenship should, in theory, not be able to use a settlement property as collateral for a European loan since Israeli-issued property deeds are not recognized.

Israeli bank stocks plunged on the heels of the policy brief. +972’s Noam Sheizaf, reports the Tel Aviv bank index dropped following the release of the brief:

The degree of nervousness in Israel over possible measures taken against local companies who do business in the settlements was evident for all to see Tuesday, after a report by a EU think tank caused the Tel Aviv banking index to drop 2.3 points in less than an hour (a total of 2.46 points for the day).

The drop in banking stocks on July 22, 2015 (Source: Calcalist.co.il)

The drop in banking stocks on July 22, 2015 (Source: Calcalist.co.il)

Although ECFR’s brief states “European leaders should actively defend differentiation from increasingly forceful efforts by Israel’s political class to misrepresent and conflate EU actions with a boycott of Israel” and that the policy “does not stem from a desire to isolate Israel, but rather from deepening EU- Israel ties and EU legal obligations”, this is a stark reminder how the entrenchment of Israeli banks in the settlement enterprise makes it virtually inevitable the boycott of settlement products and businesses in the occupied Palestinian territories will include boycotting Israeli institutions. 

There are other signs that the Israeli economy is vulnerable to BDS as well. A RAND study released in June, The Costs of the Israeli-Palestinian Conflict estimates the cost of peace (a two-state solution) would enhance Israel’s fortunes by $123 billion in a decade but “a return to violence” would have  “profoundly negative economic consequences” —  $250 billion over the next 10 years , with the Israeli economy losing some $250 billion in economic opportunities. Citing Rand economist Daniel Egel  Haaretz reported “The lion’s share of BDS’s economic damage …would result from “investment flows” — decisions by capital funds, banks and so on to restrict the amount of money flowing to Israel. ”

In addition, the potential financial fallout on Israel’s economy from the impact of an international boycott was predicted and covered up by Israel’s Finance Ministry back in 2013. Initially the state refused to release the report and fought to hide the findings. Earlier this month, after a 2-year court battle, the Jerusalem District Court ordered Israel’s Finance Ministry to release its 6 page 2013 report (available in Hebrew here) assessing the economic impact of an expanded European boycott on the Israeli economy could reach NIS 40 billion($10.5 billion) annually. That’s a low 2013 estimate.

The judge read the report and determined the information wouldn’t harm the public.

Finally, a very recent report revealing foreign direct investment in Israel had dropped by 50% in 2014, which experts said was due to BDS and Israel’s slaughter in Gaza last summer.

Chickens coming home to roost. It’s been a very long time coming. Let’s hope the EU starts taking a more active role in carrying out their policies.

annie
About Annie Robbins

Annie Robbins is Editor at Large for Mondoweiss, a mother, a human rights activist and a ceramic artist. She lives in the SF bay area. Follow her on Twitter @anniefofani

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18 Responses

  1. amigo
    amigo
    July 23, 2015, 4:49 pm

    Annie, they wont do anything until the Israelis piss them of further but it get,s closer every day.Israel,s decision 2 days ago to build another 900 illegal squats and approve more so called (under Israeli law) illegal outposts is just another nail in the zionist coffin.

    It,s their pockets that need to be hit and consequently their ability to finance illegal squats and continue mowing the lawn as well as fund the ongoing global charm offensive and the EU knows this but may be getting threats from the US administration to ease off.

    Last week I posted a link to a story on J Post that stated that the GOI had forgiven loans to squatters to the tune of 135 milllion dollars , some of which had 90%of the original loan still outstanding even those loans were issued in the Seventies.These squatters have been living almost for free since then. More of the same is planned.

    • Laurent Weppe
      Laurent Weppe
      July 23, 2015, 5:44 pm

      Last week I posted a link to a story on J Post that stated that the GOI had forgiven loans to squatters to the tune of 135 milllion dollars , some of which had 90%of the original loan still outstanding even those loans were issued in the Seventies.These squatters have been living almost for free since then.

      So now we know how to make Europe twist Israel’s arms: have european banks lend money to settlers, then watch the ECB and European Commission flex their muscle when they start demanding haircuts.

      • amigo
        amigo
        July 23, 2015, 7:19 pm

        “So now we know how to make Europe twist Israel’s arms: have european banks lend money to settlers, then watch the ECB and European Commission flex their muscle when they start demanding haircuts.”Laurent Weppe

        Wouldn,t work.Israel would pay their mortgage and bill it to Dick and Jane.You will have to find a far more creative method to outfox a zionist.In any case , it would be against European law to loan money to the illegal squatters.

      • JLewisDickerson
        JLewisDickerson
        July 24, 2015, 4:24 am

        DONT GET YOUR HOPES UP (TALK IS CHEAP):
        Israeli college in East Jerusalem bags $15 million of EU funds – https://electronicintifada.net/blogs/david-cronin/israeli-college-east-jerusalem-bags-15-million-eu-funds

    • annie
      annie
      July 24, 2015, 10:23 am

      amigo, Annie, they wont do anything until the Israelis piss them of further but it get,s closer every day.

      sometimes when i cover stories such as this one, i feel like it’s all part of some endless loop..like didn’t i already write this 2 years ago and last year and last month? ( yes i did! as evidenced in the embeds) needless to say a sense of fatigue sets in sometimes..like alright already! and needless to say i don’t get the same sort of thrill and sense of relief i might have felt 2 years ago when i wrote the earthquake story. but we have to keep keepin’ on believing that in fact it DOES get closer everyday.

      and even tho i perfectly understand why a story like this, which is a repeat story, might not hold a lot of fascination for people or get shared a lot or heavily trafficed but still… i think it’s worth it for the archives. for me it’s much less crucial in so many ways than reading about how israel shot another palestinian yesterday … and the day before… which they did. each one of those lives .. poor beit ummar, that village has really suffered and keeps suffering from the strangulation. it’s all such a tragic endless loop. but we must persevere. i so admire palestinian sumud. if they can do it so can we. ..it’s the least we can do.

      about that jpost story … i will check your archives as i would like to read it. i had not heard of it. thanks.

      • ritzl
        ritzl
        July 24, 2015, 6:00 pm

        Great comment Annie.

        I think it’s a matter of the EU slowly building a case. Incrementally unfurling the big red flag.

        So a big Thanks for your efforts! Please keep them coming. All this does matter.

        And you’re right about writing for posterity. The archives here do and will show how the seemingly unassailable tangle of pro-Israel, Zionist influence was ultimately unwound.

      • amigo
        amigo
        July 25, 2015, 12:48 pm

        Annie , here is the link to that debt settlement I mentioned.

        http://www.haaretz.com/news/israel/.premium-1.666213

      • just
        just
        July 26, 2015, 3:54 pm

        A terrific article and comment, Annie~ thanks so much! I so agree with this:

        “it’s all such a tragic endless loop. but we must persevere. i so admire palestinian sumud. if they can do it so can we. ..it’s the least we can do.”

        Thanks also to ritzl and amigo for their comments, too!

  2. Bumblebye
    Bumblebye
    July 23, 2015, 6:38 pm

    I had a look at ecfr’s list of experts and spotted Dimi Reider! 972? Actually, most of them are a young crowd.
    The Foreign and Commonwealth Office has also issued its mid-year report on “Israel and the Occupied Palestinian Territories”:
    https://www.gov.uk/government/publications/israel-and-the-occupied-palestinian-territories-opts-in-year-update-july-2015/israel-and-the-occupied-palestinian-territories-opts-in-year-update-july-2015

    bah! can’t see why link won’t work! It does.

    • amigo
      amigo
      July 23, 2015, 7:02 pm

      “bah! can’t see why link won’t work! It does”Bumbebye

      It does and thanks.It,s nice to know the UK gov is keeping tabs on Israel.

  3. JWalters
    JWalters
    July 23, 2015, 6:47 pm

    Great report on an extremely welcome development. The ECFR is saying in effect, “We’re not objecting to Israel existing, but we are objecting to its crimes”.

    Israel’s banks treating stolen Palestinian land as part of Israel is nothing new. That started in 1948.

  4. ziusudra
    ziusudra
    July 24, 2015, 5:57 am

    Greetings Annie,
    You bring it on: Journalism with substance.
    Appreciated fully.
    ziusudra
    PS There are laws to restrict bad behavior on everyone.
    The purse sighs in despair easily being very delicate in nature.
    You won’t hear a belch, but a puff of deflation.

  5. ivri
    ivri
    July 24, 2015, 11:32 am

    “Chickens coming home to roost”. Well, there are all kinds of chickens here. Recommendations is one thing, and the EU boycott threats is already a long saga, but in the end it will come to a moment of truth, which is no other than: will or will not German corporations and banks boycott Israeli corporations and banks?
    Germany is the clear boss of the EU – if it wants it can block or delay (forever) anything – and even if now there is a good (and “morally justified”) case to punish the Jews in Israel (there is no other way to present that since Israel defines itself as the Jewish State) – would not doing that be still quite problematic for Germany?
    Consider the parallel Greek drama – for too many what`s going on there brings up bad memories but Germany feels that it has no choice because of compelling macro finance and political reasons. Now what would be the parallel crucial reasons to do something that will surely garner similar reactions? Exacerbating an image problem that Germany cannot be happy about.
    So the saga is moving on but let`s see what happens when it comes to the true crunch?

    • annie
      annie
      July 24, 2015, 4:59 pm

      and even if now there is a good (and “morally justified”) case to punish the Jews in Israel (there is no other way to present that since Israel defines itself as the Jewish State) – would not doing that be still quite problematic for Germany?

      sooo— israel gets a free pass from germany for historical/guilt reasons? that wouldn’t be very ethical now would it?

    • ritzl
      ritzl
      July 24, 2015, 6:23 pm

      @ivri-

      A) There is absolutely another way to put it. “ISRAEL, the country, is doing…”

      B) Even if you accept the “Jewish State” manipulation as somehow suggestive of a real and ongoing persecution of Jews, you have to swallow the falsehood that the “Jewish State,” and therefore “the Jews” in your calculus, can NOT conceivably do anything worthy of sanction.

      It is self-evident to everyone (even you, I suspect) that that is simply not the case — and has been for generations now.

      60+ years ago that argument had sway given the recency of the Holocaust. People were willing to overlook the Nakba, wrongly so, but willing nonetheless, out of the guilt you’re seeking to induce. But after generations of glaring documented murderous contradictions to that assertion, it has become a meaningless claim.

      That you would and continue to trot it out NOW says something. Maybe desperation. Maybe something else. Who knows.

      Maybe you can explain why you assert a claim for unique impunity for murderous acts performed by Jewish-Israelis. Are we supposed to ignore “our own lyin’ eyes,” feel bad, and change our minds?

      I don’t get the thought process. What am I missing? Please explain.

      PS. Once again, your construct ignores 20% of the population of Israel who would take the hits right alongside their Jewish countrymen. Poof! For the sake of your argument, they don’t exist. Please explain that thinking while you’re at it.

      • ivri
        ivri
        July 25, 2015, 11:18 am

        @ritzl
        The difference between my views and yours is mainly in how we see the history of the conflict that Israel is in. Evidently, you, as many on this site, see Israel as the negative part of the equation while I see the opposite – and I don`t expand here because after 70 years and zillion words written on this subject both you and me understand exactly what this difference is about.
        Regarding Germany, there is no desire to push it into what is improper – that would indeed be immoral. What is expected of it that given how complex and ambiguous the situation truly is – clearly not unequivocal at all – that it would sympathize with Israel and not the other way round – that is, see things Israel`s way (as e.g. as many people in the US do) . After all, and it is here where History comes into the picture, Germany bears great responsibility to a country that many residents of are refugees from what it did in Europe. The Israel saga is the real chance For Germany to take a clear supporting stance – as different from just nice words of regret about what happened in the past. In view of that playing “moral purist” now and ignoring the truly tough circumstances that Israel operates in – just watch what goes on in the Mid-East at large – is not moral at all.

      • annie
        annie
        July 25, 2015, 11:57 am

        there is no desire to push it into what is improper – that would indeed be immoral. What is expected of it that given how complex and ambiguous the situation truly is – clearly not unequivocal at all – that it would sympathize with Israel and not the other way round – that is, see things Israel`s way

        but it’s not complex and ambiguous. it’s apartheid, it’s wrong and immoral.

        “History comes into the picture, Germany bears great responsibility” >”sympathize with Israel”> “there is no desire to push it into what is improper”

        i don’t believe you! you’re using history to guilt trip germany into being “improper”.

      • ritzl
        ritzl
        July 25, 2015, 7:17 pm

        @ivri- Actually, I don’t know what our differences are about. That’s why I asked. I can’t imagine there being a difference, all you have to do is read Kate’s litanies (just one) to see something is wrong, very, very wrong, in/with Israel (sanction-worthy wrong). To not be affected by those litanies is to be a stone.

        But, you may have given a couple of Freudian slips of partial answers.

        “The Israel saga is the real chance For Germany to take a clear supporting stance…”

        Chance? They’ve been DOING it for decades. My guess is that they will NEVER succeed, in your view (and the GoI view, as stated by that reporter who recently let slip that it’s GoI policy to keep Germany on the guilt hook – no matter what they do and how long they do it for).

        Answer: You simply want the dotage to continue.

        History?? Are you really saying (I think you are) that what Germany did to the Jews gives them/you license to kill whomever you want, wherever you want, and for as long as you want. Does Israel’s (again “Jews” in your calculus) past and ongoing treatment of the Palestinians give them license to kill you, wherever they find you, and for however long they might want to pursue you? We ALL know the answer to that. So why the special case for Israel/Jews?

        Which leads to the second Freudian slip/glaring assumption:

        “Evidently, you [ritzl], as many on this site, see Israel as the negative part of the equation while I see the opposite…” (i.e. “We’re the good guys. Why are we the good guys? Because we just ARE.”) Ergo, it’s all persecution — by definition.

        That’s circular reasoning wrt logic, and target fixation wrt effect. The alternative course would be to recognize both, as normal people would, and take steps to pull out of the dive. I just don’t understand why you maintain that you have to (have the right to) kill Palestinians and no one is supposed to mind. It’s weird.

        Answer: Because what’s theirs is mine (or something along those lines) and I want it.

        You still didn’t answer the question about why, in your view, BDS only impacts Jews and not Palestinian citizens of Israel.

        Yep, the differences in your view and mine ARE stark. Normal people can read our explanations and decide whether condemnation of, and sanctions for, bad acts perpetrated by Jews against a people who had ZERO to do with Nazi Germany’s horrors, constitutes persecution of Jews.

        I don’t think they would.

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