EU policy was slightly more incisive than in 2012. Europeans have slowly started to modify Israel’s cost-benefit calculations about the occupation.
In 2013, Europeans worked more effectively than in the past on making clear the distinction between Israel and the Occupied Palestinian Territories (OPTs). Peace talks resumed in the summer thanks also to combined EU and US efforts, but had not yielded any significant results halfway through the self-imposed nine months’ timeline. There was continued slippage in EU-supported Palestinian state building, with Palestinian Authority (PA) finances and the Palestinian economy continuously deteriorating. Absent tangible results on the political track, the EU state-building project in the OPTs seems doomed to fail.
High Representative Catherine Ashton pushed for a growing distinction in policy towards settlements in the OPTs and Israel. In April, 13 EU foreign ministers expressed their support for such an approach; Ireland and Spain were particularly active in pushing for it. In July, the European Commission issued guidelines that denied EU “grants, prizes and financial instruments” to Israeli entities based in the OPTs. While affecting only 0.5 percent of relevant EU project funding for Israel, these guidelines provoked a relevant reaction in Israel and proved to be a concrete step towards affecting Israel’s cost-benefit calculations about the settlements enterprise. The European Commission maintained a firm position in ensuing negotiations about Israel’s inclusion in the Horizon 2020 EU scheme for support on research and development, and the Israeli government promised to compensate settlers for the loss incurred because of the guidelines.
Meanwhile, EU–Israel co-operation continued to thicken: in June, an “Open Skies” agreement paved the way for more direct flights between Europe and Israel; in October, Israel became a partner in the EU’s Global Navigation Satellite System (GNSS) for co-operation on navigation satellites. The EU continued to assist the PA through the PEGASE programme (€156 million) and to refugees through donations to the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). Notwithstanding the financial crisis of both the PA and UNRWA, which worsened in 2013, Europe remains the largest donor to the Palestinians.