European Union representatives denied on Wednesday that if the peace talks failed and Israel were blamed that the EU might revoke its formal economic ties with Israel, The Jerusalem Post reported.
The denial came in response to a startling warning issued by Finance Minister Yair Lapid said at the INSS conference in Tel Aviv on Wednesday, saying that the impact of such a boycott on the Israeli economy would be very serious.
“If the negotiations with the Palestinians stall or collapse and we enter the reality of a European boycott — even if it’s extremely limited — the Israeli economy will falter and every Israeli citizen will feel the pain directly,” he said.
Lapid referred to the association agreement with Israel, which serves as the legal basis for Israel-EU ties.
“Just canceling the ‘association agreement’ with the EU, which we know is already on the table now as far as they’re concerned, would reduce exports NIS 3.5 billion, harming GDP by NIS 1.5 billion and causing 1,400 layoffs,” he predicted.
In his speech, Lapid listed the dire consequences:
“If negotiations with the Palestinians will stall or blow up and we will enter the reality of a European boycott, even a very partial one, the Israeli economic will retreat backwards, the cost of living will rise, budgets for education, health, welfare and security will be cut, many international markets will be closed to us,” he said. “If there will not be a political settlement, the Israeli economy will face a dramatic withdrawal that will substantially hurt the pocket of every Israeli.”
But the denial was unequivocal: “There has been absolutely no consideration in the EU of the abrogation of the Association Agreement. It is not in the cards,” they said.
Europe is Israel’s main trading partner, accounting for 33% of trade. Israel’s preferential trade ties with the EU, participation in cultural and scientific bodies, its recently passed Open Skies Agreement and other important treaties fall under the framework of the Association Agreement.