West Bank annexation will bring an end to the EU’s cherished two-state solution. International norms and the EU’s own laws will now need to underpin post-annexation relations with Israel. 

With this week's swearing-in of a new ‘unity’ government, Israel continues its path towards annexing West Bank territory as early as 1 July. From the vantage point of Balfour Street, Binyamin Netanyahu’s official residence as prime minister, there are numerous domestic political reasons to follow through on his election promise to extend sovereignty to the West Bank settlements; and few reasons not to.

With no real domestic impediment, a strong international response is one of the few things that could force the Israeli government to think twice before annexing. As a key defender of the two-state solution, this should be the European Union’s moment to push back against annexation (together with the United Nations and League of Arab States).

Until now, however, muted and divided European warnings have been easily dismissed by supporters of the settler movement. While an overwhelming majority of EU member states oppose annexation and feel that there should be some consequences, there have been internal disagreements over the timing of the EU’s warnings, with some wanting to give the new government time to demonstrate its intentions. And then there is the long-standing issue of Hungary, which continues to push back on just about every measure that displeases Israel. 

Faced with a US administration whose enthusiasm for annexation appears to outpace that of Netanyahu, and heavily absorbed in its own internal consensus building efforts, the EU could find that any step it takes risks being too little, too late.

Annexation – whether it starts with one settlement block or most of Area C – will cross a threshold which will be almost impossible to reverse back on. The full repercussions that such a move will trigger may be slow in coming, but they are real. This will challenge EU credibility and relevance. It will also undermine the fundamentals of the international rules-based order – in particular, the prohibition on the acquisition of territory through force. The formal demise of the Oslo-configured two-state peace process – which has been moribund for years – will also confront Israelis and Palestinians with a one-state reality in which Palestinians live under an increasingly explicit system of apartheid.

The EU and its member states should engage in some self-reflection, and do so with a large dose of humility

As a new chapter in the Israeli-Palestinian conflict begins, there will be many questions, and few answers. Should the new political objective be the creation of a binational and democratic state encompassing Israel, the West Bank, and Gaza? What are the implications for the Palestinian Authority (PA) and the State of Palestine? How should international diplomacy and funding be reshaped?

When it comes to deciding the future of their internationally recognised right to self-determination, it will have to be Palestinians themselves that provide initial answers to these questions. Certainly, many Palestinians have already been having this debate for the last few years. But arriving at a new strategy that can mobilise the full weight of the Palestinian national movement will be far from instantaneous.

The EU and its member states should use this time to engage in their own self-reflection. And they should do this with a large dose of humility. After all, it is Europe, along with the United States, that has been the main proponent of the two-state paradigm – wrestling successive concessions from the Palestine Liberation Organisation to support this idea, without ever doing enough themselves to actually make it happen. This includes their complete unwillingness to seriously confront Israel’s internationally unlawful actions or even recognise the State of Palestine (with the honourable exception of Sweden).

The consequence of international acquiescence to Israel’s voracious settlement project has been to abandon Palestinians and effectively maroon them in disconnected Israeli-controlled cantons in Gaza and the West Bank. Instead of the independent and viable state they had been promised, Palestinians must now contend with apartheid. This is in some part Europe’s own making.

Faced with the consolidation of a one-state reality, the EU should acknowledge that the two-state logic that has underpinned its own policies for the last three decades may no longer hold. As a first step, the EU should initiate a broad policy review looking at the implications that annexation and the demise of the Oslo-configured two-state solution will have on relations with Israel, the PLO/PA, and its overarching peace-making efforts.

In doing so, European officials should avoid looking back on what went before with fondness and nostalgia. Instead, they should put the preservation of international norms and the EU’s own laws at the heart of a new post-annexation policy.

Most immediately, and unavoidably, annexation will have the greatest effect on relations with Israel. The complete erasure of the pre-June 1967 Green Line and Israel’s de jure absorption of West Bank territory and its settlements risks seriously impeding bilateral relations particularly, but not exclusively, in the economic sphere given the EU’s commitment to distinguishing between Israel and the settlements, and non-recognition of Israeli sovereignty over the occupied Palestinian territory.

The response of the EU and its member states to this challenge will be to implement UN Security Council resolution 2334 by deepening and hardening differentiation measures against Israeli settlements. This could include strengthening the EU’s financial guidelines, restricting Israeli settlement products but also extend into other areas, including social security, taxation, and consular services. Much of this can be done without the need for a new European Council decision.

The disappearance of the two-state solution, and the emergence of an internationally recognised situation of apartheid, will have deeper repercussions over the long term, threatening the whole edifice of the EU’s relationship with Israel. It is unlikely that the EU will be able to sign new agreements with Israel due to opposition from at least some member states (since unanimity is required) and within the European Parliament. Other aspects of EU-Israel relations will be put on the table: from the Association Agreement and existing trade arrangements, to cooperation programmes (such as Horizon Europe) and funding through the European Neighbourhood Instrument.

Added to these complexities, European governments will have to weigh relations with Israel with their desire to defend the broader international architecture and its prohibition on the acquisition of territory through force. Such considerations matter particularly among eastern members – traditionally more supportive of Israel – given their concerns that a weak response to Israel’s annexation could send a problematic signal to Russia, which they fear harbours further territorial ambitions. Within this context, some member states will undoubtedly push for the sorts of measures enacted following Russia’s annexation of Crimea.

Alongside all this, the EU’s relations with Palestinians will need to be recalibrated. The disappearance of the two-state solution (and a gradual shift by the Palestinian national movement towards one-state strategies) will call into question the logic of EU funding for Palestinian state building, embodied by the PA. Further reflection on this will be needed. But one response could be to direct additional funding towards ongoing efforts to help sustain Palestinian political, cultural, and social presence on the ground. The EU could also consider supporting Palestinian civic society, focusing on non-violent youth communities and leadership structures.

Most fundamentally, though, the EU and its member state should be clear that if a two-state solution is no longer a viable option, then the only alternative acceptable means of achieving equal rights for both peoples will be through a binational state. This means unequivocally rejecting the consolidation of the one-state reality of open-ended occupation and unequal rights for Palestinians – to use the EU’s own jargon.

Read more on: Europe and the world , The Middle East and North Africa, Israel / Palestine, gaza crisis

The European Council on Foreign Relations does not take collective positions. This commentary, like all publications of the European Council on Foreign Relations, represents only the views of its authors.