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