Israel reacts angrily to EU sanctions

Israel reacted angrily Tuesday to an effort by the European Union to keep EU funds from flowing to Israeli organizations operating in the 1967 occupied territories.

Israeli Finance Minister Yair Lapid said in a statement that the EU had made a “miserable’” decision, but he also said that every day of stalemate hurts Israel’s international standing. Many Israelis fear that if negotiations remain stalemated, Israel eventually face an even broader economic boycott.

Currently the EU is negotiating an agreement with Israel on research and innovation funding that could benefit Israeli universities and other organizations, as well as a pact for greater cooperation between the EU police unit Europol and Israeli authorities.

But under guidelines set to be published Friday in Brussels, Israeli entities based in the occupied territories—the West Bank, East Jerusalem (al-Quds) and the Golan Heights—would be banned from receiving grants, prizes or other money from the common EU budget, starting in January 2014.

Such accords would then have to include a clause specifying that EU resources couldn’t be used in the occupied territories, although some flexibility would be allowed, officials said.

Over the last seven years, Israel has received some €800 million ($1.05 billion) in funding from the EU. Of that, the EU estimates only around 0.5% went to entities in the occupied territories, according to an EU official.

Israeli Prime Minister Benjamin Netanyahu said "We won’t accept any external dictates on our borders.” He said at a special meeting of cabinet ministers to discuss the new guidelines that the issue would be decided solely in negotiations.

A spokeswoman for EU foreign-policy chief Catherine Ashton said the new guidelines are in line with the EU’s “long-standing position” that it doesn’t recognize Israeli sovereignty over the occupied territories and that Israeli settlements there are illegal.