The Brief by Euractiv featured an opinion article by Alexandra Brzozowski and in it she questioned, “Is the EU ready to break taboos and restrain Israel? Talk is floating in the mediasphere of the the European Union sanctioning Israel. The topic if this article is to look at sanctions and how they would hurt the European Union.
If the (EU) were to sanction Israel, it could have significant economic, political, and diplomatic consequences. The European Union and Israel currently have an assocation agreement, and Israel is an associate state of the EU. They share extensive ties not just in trade but in joint research projects. Currently the European Union has a trade surplus with Israel.
- The total trade in goods between the EU and Israel in 2022 was €46.8 billion. The EU’s imports from Israel were worth €17.5 billion, while the EU’s exports to Israel amounted to €29.2 billion, resulting in a positive trade balance for the EU of €11.7 billion .
The European Union by issuing sanctions on Israel risks that some products might be difficult to replace: Israel has a high-tech industry and specializes in certain products, like advanced military equipment, that might be hard for the EU to replace with alternative sources.
Moreover sanctions could lead to shortages: If the EU suddenly stops importing Israeli goods, it could lead to shortages or disruptions in supply chains, potentially affecting EU industries and consumers.
EU sanctions on Israel would likely have a significant impact on the trade relationship between the two, potentially affecting various aspects of their economic exchange. In detail sactions would cause the following effects:
- Reduced Israeli exports to the EU:
- Restrictions or tariffs on Israeli goods, particularly in sectors like machinery, transport equipment, and chemicals.
- Decreased demand for Israeli products, leading to reduced exports and revenue losses.
- Limited EU exports to Israel:
- Israeli imports from the EU might be subject to restrictions or higher tariffs, making EU goods more expensive.
- Reduced demand for EU products, leading to decreased exports and revenue losses.
- Disruption of supply chains:
- Sanctions could affect the flow of goods and services between the EU and Israel, causing delays and increased costs.
- Companies might need to find alternative suppliers or adjust their production processes.
- Economic losses for both parties:
- The EU would likely lose a significant trade partner, and Israeli imports could become more expensive or difficult to obtain.
- Israel would face reduced exports, potential economic instability, and possible recession.
- Impact on specific industries:
- Sanctions could target specific sectors like defense, technology, or agriculture, affecting companies and industries on both sides.
- Increased costs and bureaucracy:
- Compliance with sanctions would require additional administrative efforts and costs for companies trading with Israel.
- Potential countermeasures by Israel:
- Israel might impose retaliatory measures or sanctions on EU countries or companies.
- Regional implications:
- Sanctions could exacerbate regional tensions, potentially affecting other countries and trade relationships in the Middle East
EU Sanctions and Israel’s Participation in the EU’s Horizon Programs
The European Union’s Horizon programs are research and innovation funding initiatives that aim to tackle climate change, achieve the UN’s Sustainable Development Goals, and boost the EU’s competitiveness and growth
- Horizon Europe is the EU’s key funding program for research and innovation, with a budget of €95.5 billion available over seven years (2021-2027).
- Israel has received €2.5 billion in funding under Framework Programme 7, Horizon 2020, and Horizon Europe.
Projects and Results:
- Over 5,000 joint research projects have been conducted between Israeli and EU entities, focusing on areas like ICT, health, advanced manufacturing, biotechnology, environment, and energy.
- Examples of successful projects include SniffPhone (breath analyzer for cancer detection), SOCRATES (robotics in eldercare), and G2P-SOL (Solanaceous crops genetic and phenotypic information gathering).
Participation and Success:
- Israel has been a successful participant in Horizon 2020, ranking third among associated countries in terms of overall participation.
- Israeli entities have excelled in ICT, health, advanced manufacturing, food, and biotechnology, as well as environment and energy.
Focus Areas and Sanctions Impact:
Horizon Europe invests in areas of strategic importance to Europe and Israel, including green transition (35% of funding), sustainability goals in health, education, manufacturing, energy, mobility, agriculture, and food systems.The program focuses on transferring developed knowledge and innovative solutions to real-life environments, where they can generate impacts and benefit citizens.
- Funding reduction: Sanctions could lead to a reduction in funding for Israeli participants in Horizon programs, making it harder for them to participate.
- Limited access: Sanctions could limit Israel’s access to Horizon programs, restricting their ability to collaborate with European partners.
- Exclusion from specific projects: Sanctions could lead to Israel’s exclusion from specific Horizon projects, particularly those related to security or defense.
This would also harm Israeli Industry, including the hi-tech sector, which is a significant participant in the EU’s Horizon programs and lead to a diplomatic fallout.
By harming Israel’s participation in Horizon programs, EU sanctions could ultimately harm the EU’s own research and innovation ecosystem, competitiveness, and reputation.
EU sanctions on Israel could harm the EU in the Horizon programs in 10 ways:
- Loss of Israeli expertise and innovation: Israel is a leader in fields like cybersecurity, AI, and biotechnology. Sanctions could limit EU access to Israeli expertise and innovation, hindering progress in these areas.
- Reduced collaboration and knowledge sharing: Sanctions could lead to reduced collaboration between EU and Israeli researchers, limiting the exchange of ideas and knowledge.
- Decreased competitiveness: EU sanctions could harm Israeli industries, making them less competitive. This could lead to reduced participation in Horizon programs, ultimately weakening the EU’s industrial competitiveness.
- Negative impact on EU’s research and innovation ecosystem: Sanctions could lead to a brain drain, as Israeli researchers and innovators seek opportunities elsewhere.
- Reduced access to Israeli markets and industries: Sanctions could limit EU access to Israeli markets and industries, hindering the development of new technologies and innovations.
- Damage to EU’s reputation as a promoter of international cooperation: Sanctions could be seen as a political move, damaging the EU’s reputation as a promoter of international cooperation and collaboration.
- Reduced impact on global challenges: EU sanctions could limit the ability of EU and Israeli researchers to work together on global challenges like climate change, health, and security.
- Financial losses: Sanctions could lead to financial losses for EU entities that have invested in Israeli research and innovation projects.
- Reduced access to Israeli funding: Sanctions could limit EU access to Israeli funding for research and innovation projects.
- Negative impact on EU-Israel relations: Sanctions could damage EU-Israel relations, leading to a decrease in cooperation and collaboration in other areas.
Conclusion
The European Union is already facing the negative effects to its economy from Russian sanctions, Moroever while the European Union is unique in that it is a hedged economy given its over 80 trade pacts, literally rendering it a world hub for trade, there are still many flaws within the European Union market that are in the process of being worked on to “complete the single market.” In addition the EU is planning on both a treaty change and an enlargement to take in up to ten more members. In sanctioning Israel the European Union will inflict a grevious wound upon itself at a crucial time in its evolution. The European Union is an evolving economic and political power. Israel is a strategic ally for the European Union and a key partner trading providing the European Union needed products, resources and talent.
It is easy for a politicians to demand “sanctions” and also a two state solution as these are “feel good” politics, meaning diplomats and media feel good when they express this leglislation as if these proposals will solve the issues. In actuality, they are embracing media disinformation and speaking out of ignorance of Israel’s current relationship with the European Union and how both of these polices will inflict wounds on the European Union itself.