The EU decision to issue new regulations governing dealings with Israel is a sign of new international disapproval with Israeli settlements built on occupied Palestinian territory. Starting in 2014, the EU will prohibit any dealings with private Israeli entities that live or operate in the West Bank. The idea is to make a distinction to show Europe's seriousness about considering Israel's occupation to be in violation of international law. The EU's new funding guidelines will apply to grants, prizes and financial instruments funded by the EU which issues dozens of grants, totaling millions of euros, to Israeli universities, companies and researchers each year. The purpose of these guidelines is to make a distinction between the state of Israel and the occupied territories when it comes to support from Europe which is Israel's largest trade partner. It also bolsters the Palestinian claim to its territories. The guidelines conform to the EU's longstanding position that Israeli settlements are illegal under international law, irrespective of what Israel thinks about the settlements domestically. The EU position has consistently been that the country which calls itself Israel is defined by its pre-1967 borders, or Green Line, and that anything built beyond those borders is not part of Israel. The sanctions are designed to give more bite to that position. Under the new budget guidelines, EU bodies must make sure not to fund any Israeli activities in occupied territory. Any future agreements between the European Union and Israel must explicitly state that they apply only within the pre-1967 lines. By grouping east Jerusalem with the West Bank, the decision is especially tough for many Israelis who consider these areas somehow distinct from the settlements and do not view its Jewish residents as settlers. The move is a follow-up to a decision last December in which the 28-member EU (as a unit, individual states are not governed by these guidelines) barred goods produced in Israeli settlements from receiving customs exemptions given to Israeli goods. The new guidelines are significant precisely because of the otherwise warm relationship between the EU and Israel which is uniquely close for a non-European country. The decision says that close ties are not stopping the EU from showing its displeasure with the settlements and it highlights Israel's growing isolation over their construction and its deteriorating position on the global stage. The decision puts Israel in a difficult situation: appear to agree that the occupied territories, including east Jerusalem and the annexed Golan Heights, are not part of Israel, or risk losing funding and collaboration opportunities provided by the EU; to continue occupying the West Bank and risk further damaging its relations with the international community - not to mention its trade prospects - or to fully comply. The quandary of Israel is that the settlements are undermining Israel itself. Peace talks have been stalled for nearly five years with Israeli settlement construction at the heart of the deadlock. Continued settlement construction is a sign of bad faith and eats up Palestinian land for an eventual state. This is not an economic boycott of Israel although Europe's shunning of the settlements could also eventually lead to a full-fledged boycott of Israeli goods if peace efforts do not resume. The EU is simply making a distinction between Israel and illegitimate settlements and forcing Israel to face the consequences of occupation. As long as Israelis do not pay a price for the occupation, they have no incentive to bring it to an end.
