EU differentiation and the push for peace in Israel-Palestine

Press release

Renewed focus on ‘differentiation’ one of few hopes for saving the two state solution


Europe and its member states must accelerate efforts to ‘differentiate’ between the internationally recognised state of Israel and its illegal settlements located on Palestinian land . This represents one of the few remaining hopes of saving the two state solution and is essential in protecting the integrity and effectiveness of Europe’s own legal order, according to a new report from the European Council on Foreign Relations.

Next year will mark the 50th anniversary of Israel’s occupation of Palestinian territory and the launch of its settlement project, described by the report as “the greatest and most immediate threat to the viability of a two state solution”. The lack of any real political horizon for ending the conflict 20 years after the initiation of the Oslo peace process indicates the failure of Europe’s approach to the conflict thus far.

This approach has traditionally been based on providing incentives to Israel, such as the 2013 Special Privileged Partnership proposal, to take positive steps towards the Palestinians. But far from furthering the prospects of peace, such unconditional incentives have only proved to Israel that it can expand its annexation of Palestinian territory with impunity.

Instead, Europe needs to introduce more disincentives into its dealings with Israel in order to discourage settlement activity, and in ‘differentiation’, it has a ready-made legal tool to do just that.

Differentiation refers to actions by the EU and its member states to exclude settlement-linked entities from their bilateral relations with Israel – a legal requirement which has broad support among EU institutions and member states but on which progress has been painfully slow.

This is partly because of Israeli efforts to disrupt EU politics, as was demonstrated in January 2016 when Israel managed to co-opt Greece, Poland, Bulgaria and Hungary to water down language in the Foreign Affairs Council Conclusion on the MEPP, which was due to advance the process of differentiation. For 14 years, Israeli lobbying in The Netherlands also managed to delay the reduction of pension payments to Dutch nationals residing in the settlements, despite the decision being announced in 2002.

As such, deepening differentiation must begin with improving European cohesion by articulating the legal necessity that drives it, appreciating the political good that results, and effectively countering Israel’s disinformation campaign. Europe should develop a strategic communications strategy to explain its actions to the Israeli public, and frame the long-term risks that Israel’s prolonged occupation and annexation will have on Israel’s bilateral relations.

Beyond communications, Europe must accelerate the process of differentiation by ensuring the correct, full and effective implementation of EU and member state legislation. Member states must also do more to raise awareness of the legal, financial, and reputational risks for European businesses involved in settlement activities, including those implicating Israel’s banking sector.


Notes to editors

Hugh Lovatt is available for comment. You can reach him at [email protected]. Or alternatively, please contact the press office.

You can read the full paper here.

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