Zeev Elkin, Israel's deputy foreign minister is worried that the chasm between the EU and Israel will continue to grow if there is no solution to the new EU criteria concerning Jewish settlements in Judea and Samaria.
I think Elkin is worrying too much. Yes, Israel is heavily dependent on trading agreements with Europe, but it’s just as true to say that Europe is dependent on Israel. Why? For the simple reason that Europe must become a dynamic knowledge economy if it is to compete with Asia and the US, and the best way to achieve this is for the EU to work closely with its neighbor and economic partner, Israel.
After all, when it comes to knowledge-based industries, Israel is one of the most competitive economies on the planet thanks to its remarkable capacity for innovation. Indeed, it is no secret that Israel is a world-leader in the hi-tech and start-up sectors. Israel’s remarkable laboratories and scientific institutes are the envy of the world and a magnet for international investment.
Let’s look at the facts. Israel boasts around 4,000 technology start-ups, which is more than any other country outside the US. Not surprisingly, half of Israel's exports are of the hi-tech variety. Israel leads the world in patents for medical equipment and is a supplier of inexpensive but crucial medicines to Europe (such as Copaxone for multiple sclerosis and Actos for type 2 diabetes). And it has attracted the most venture capital investment per capita in the world, 30 times more than Europe.
In the years and decades to come, Israeli engineers, computer scientists, inventors, chemists and biologists will drive not only Israel’s economy but will provide benefits to Europe and the world at large. The UK for example is quietly building solid trade links with Israel amid talk of a stronger partnership between British and Israeli companies in the areas of innovation, hi-tech and science. (The fact that a young and tiny country like Israel is well ahead of the UK in terms of research and development speaks volumes about the lackluster nature of British industry.)
If Europe wants to compete with China and the US in the areas of medical technology, homeland security, communications and aviation, then it must cooperate with Israel and jettison its pointless obsession with Palestinian Arabism. On one level, the EU is well aware of this. This is why Israel was the first non-European country to be associated to the EU’s Research and Technical Development program. It is also why the EU wants Israel involved in the Horizon 2020 program.
But there is a problem. In July the EU issued guidelines (due to come into effect next January) that say any agreement between the EU and Israel must include a clause in which Israel relinquishes its claim over East Jerusalem and Judea-Samaria. This is unacceptable to Israel and has jeopardized Israel’s involvement in Horizon 2020, the EU’s flagship initiative aimed at securing Europe's global competitiveness.
Antonio Tajani, the European Commission’s vice president for enterprise and industry, has pledged to strengthen industrial cooperation between the EU and Israel. Indeed, the whole point of his recent two-day mission to Israel was to procure Israel’s cooperation in the areas of space technology, communications and water technology. The implication is that without Israeli input, EU industry will lag behind the rest of the world.
Tajani specifically wants Israel to sign the Horizon 2020 agreement because Europe needs Israel’s cooperation in the areas of job creation and scientific research. In other words, Israel’s involvement in the flagship scheme would not only benefit the Jewish state, it would boost prosperity in Europe.
This is echoed by Elmar Brok, a German Christian Democrat politician and foreign policy adviser to Angela Merkel. He has publicly stated that Israel’s participation in Horizon 2020 is important to Europe.
“I think it is a European interest. It would be stupid of us if we do not continue this cooperation,” he said, before adding: “Because it is very much to our advantage.”
The deadline to sign Horizon 2020 is the end of November, which is why the EU is trying desperately to reach a compromise solution in the coming weeks.
Without Israel, Europe is less competitive. And in the aftermath of a global recession and a continuing Eurozone crisis, a return to economic competitiveness is vital for the well-being of Europe and the rest of the world.
The EU leadership must be realistic and abandon the insane boycott of Judea and Samaria and concentrate instead on building solid relations with the world’s leading innovator, Israel.