RENEWAL OF EU/ISRAEL ASSOCIATION AGREEMENT COULD

C O N F I D E N T I A L TEL AVIV 000920 SIPDIS E.O. 12958: DECL: 04/23/2010 TAGS: PREL KWBG EU IS SUBJECT: RENEWAL OF EU/ISRAEL ASSOCIATION AGREEMENT COULD SPARK TENSIONS Classified By: Political Counselor Marc Sievers, reason 1.4 (b) and (d) ¶1. (C) SUMMARY. According to an EU contact, the EU has not made a formal decision to suspend talks on a potential relationship upgrade because of the foreign policy of the new Israeli government, despite a front page article in the April 23 Ha'aretz to the contrary. However, some EU member states are concerned about Israel's positions and will likely hold up the discussions until the Netanyahu government unequivocally accepts a two-state solution. Israel's current association agreement expires on May 31, and while a quiet technical rollover is possible, Israel is insisting on getting the upgrades in the next association agreement. This may force a European discussion on Israel before the GOI is ready for it. END SUMMARY. ¶2. (C) On April 23, PolOff discussed the progress towards an upgraded Israel/EU Association agreement with Maja Sverdrup, Advisor to EU Special Representative to the Middle East Marc Otte. Sverdrup stressed that although there had been discussions about linking the peace process to an upgraded Israel/EU Association Agreement, no formal decision had been made. Because such a decision would require consensus from all member states, Sverdrup doubts that there will be any formal linkage. However, she cautioned that there are member states that are very concerned about the new Israeli government's policies, and these states will probably stall progress until the GOI clearly backs the full two-state solution. ¶3. (C) Sverdrup said that there are efforts to allow Israel some time to formulate its policies. For example, the Israel association agreement has been removed from the agenda for the General Affairs and External Relations Council meeting on April 27, in an attempt to prevent unhelpful discussions about Israel based on policy speculations. She noted that even this may change, because certain member states are extremely concerned about recent reports in the Israeli press and do not feel Europe can wait to take a stand. She added that the Czech Presidency has been clear about Europe's demand for Israel to accept a two-state solution and now must work to balance the interests of all the member states in deciding how to proceed. ¶4. (C) Even if Europe gives Israel more time, she explained that the time is not unlimited. Israel's current association agreement with Europe expires on May 31. While the EU would prefer to give the agreement a technical rollover and discuss upgrades later, the GOI is pressing to make those upgrades part of the renewal. If the association agreement is to be changed, the EU would need a formal discussion with Israel on the new agreement by May 17, and would have to debate it internally before that. Therefore, she said, Israel's own insistence on getting the upgrades now may force the EU to take a position on Israel before the GOI finalizes its policy. And if the new Israeli government does not state unambiguously that it supports a two-state solution before that time, it may jeopardize the entire association agreement. Sverdrup added that the upgrades Israel is requesting are purely political or ceremonial, such as a ministerial-level strategic dialogue, while the substantive matters such as economics and trade are already included in the current association arrangement. ********************************************* ******************** Visit Embassy Tel Aviv's Classified Website: http://www.state.sgov.gov/p/nea/telaviv ********************************************* ******************** CUNNINGHAM