In a surprise last minute move, the European Union set forth a strong set of economic sanctions against Israel, leaving that nation both surprised and reeling.

The sanctions, stimulated by what the EU refers to as “Israeli intransigence” regarding peace talks with the Palestinians, cover all financial dealings, loans, awards, transfer of “instruments” and severely limiting economic cooperation between Israel and all EU member nations starting in 2014.

The sanctions are against any Israeli “economic activity,” not just within what has been referred to as the “occupied territories” but broad areas of Israel that had been designated for the establishment of an “Arab State” in 1949.

Those territories extend in an almost contiguous line from the Lebanon border to the Red Sea.

Israel has referred to these territories as “Golan Heights, Judea, Samaria and eastern Jerusalem.” The term “Judea” alone could refer to the entire Roman province including large regions of Lebanon and Jordan.

Thus, one might question why the European Union would include such broad territories, clearly intended to offset Israeli Prime Minister Netanyahu’s demands for “defensible borders.”

The EU has gone much further than imagined, an act Israel sees as an “ambush.”

ISRAELI RESPONSE

Israel has responded with a number of objections citing, initially that they feel the “EU attacks us because we are small,” as cited by Gil Ronen with Arutz Sheva, Israel National News.

The sanctions, to be published Friday, July 19, 2013, will prohibit all 28 European Union member states from any economic contacts with Israeli “entities” that operate outside the 1949 Armistice lines.

These territories differ greatly from the ceasefire lines of the 1967 war and include up to 25% of the territory of Israel, according to an article in Arutz Sheva.

According to that publication, the EU has made further differentiations based on the 1967 truce lines, clearly delineating territories seized as “occupied” and requiring Israel to identify any economic activity originating from those regions for exclusion.

EU officials have commented that there has been significant pressure to modify and limit the approve sanctions prior to their upcoming publication.

SYRIA

The decision to move against Israel falls on the eve of announcements from France and then Britain to hold back materiel support for pro-Israeli factions fighting against the Syrian government.

Germany had previously announced that no aid would be forthcoming.

The United States, although announcing, in June, that arms would be supplied, has withheld promised military aid though the Syrian government has made significant advances against rebel held enclaves.

ISRAEL’S POSITION

Quoting a high ranking Israeli official:

“The attack by the EU disproportionate and is likely to have no positive effect on restarting meaningful dialog over the Palestinian question. When it comes to disputed territories, the Europeans prefer to attack a small country like Israel instead of taking on more powerful states, because they are afraid of retaliation.

We were only informed at the last moment.”

Israel’s position was confirmed by Deputy Foreign Minister, Ze’ev Elkin. In a statement to the press, Elkin referred to the EU directive as a “mistake” likely to undermine any progress already made.

“We are not ready to sign on this clause in our agreements with the European Union.”

Elkin also cited Israel’s failure to get in front of the issues that led to this confrontation which will, as he also stated, “halt all cooperation in economics” and be extremely harmful to Israel’s economy.

CONTRADICTORY EU POSITIONS

Speaking for the European Union, David Kriss is quoted:

“These are guidelines on the eligibility of Israeli entities and their activity in the territories occupied by Israel since June 1967 for grants, prizes and financial instruments funded by the EU from 2014 onwards.

(Sanctions)It makes (sic) a distinction between Israel and the entities in the West Bank, east Jerusalem, the Gaza Strip and the Golan Heights.”

It’s a very worrying initiative launched at a bad time, because it only reinforces the Palestinians’ refusal to restart negotiations.”

Kriss then called for Israel to cooperate fully with the sanctions, threatening Israel with defunding of joint projects already scheduled, projects that would otherwise not be impacted by sanctions.

PALESTINIAN RESPONSE

Arutz Sheva reports that Palestinian leaders will only negotiate based on pre-1967 lines and “if Israel freezes all settlement activity in Judea and Samaria.”

Thus far, the world press has been unaware of these expanded Palestinian demands that would require Israel to not only stop all settlement activities in areas referred to as “occupied” but over wider areas now settled by up to 1.8 million Israelis.

There are already over 550,000 Israelis living in the “occupied zones,” primarily eastern Jerusalem, known as Al Quds, and the West Bank.

The EU position impacts nearly one third of Israel’s population, one third of its economic base.

ALL ABOUT MONEY

The real impetus for increased pressure on Israel has been the failure of western economies and their disastrous currencies.

The real subtext for scaling back support for Israel has been seen in the strangely unreported change in America’s deficits.

During the last fiscal quarter, the United States has shown a net budget surplus for the first time in decades. Two of the last three months have yielded surpluses in excess of $100 billion.

The message has been clear to EU leaders, as America has drawn down its role as “policeman of the world,” the real security issue, potential economic collapse, has become less of a threat.

What is unlikely to be admitted is the simple fact that the projection of military power to secure resources, when those resources are exploited by multi-national entities, offers a very poor return.

Thus, Israel’s current dilemma is much more rooted in its role as an economic liability than in any concerns regarding human rights.