EU overtakes the US as a peace broker with significant clout

In terms of brokerage, perhaps Europe is finally overtaking the US in clout and potential for real, meaningful change in the Middle East

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You only need to observe the reactions to two recent events involving the Palestinian-Israeli conflict to gauge which track is deemed to be more of a positive development.

When the US secretary of state John Kerry announced a breakthrough agreement between Israeli and Palestinian leaders to talk about reconvening go-nowhere peace talks, there was a giant, jaded yawn from Middle East watchers. Conversely, when the European Union announced new guidelines earlier this month requiring Israel to ensure no funding goes to the settlements, many sat up and paid attention. So did the Israeli government, describing the EU's tougher stance, variously, as "an earthquake", "a brutality" and "a miserable directive" that undermines the peace process.

While analysts were describing a ground-breaking tougher stance from the EU, Israeli officials - right up to the president Shimon Peres - spent a week pleading with the EU not to go through with it. This reaction contrasts starkly with what Israeli prime minister Binyamin Netanyahu had to say about Mr Kerry's breakthrough. Israel's daily Haaretz newspaper reported about his "boasting" to his ministers: "I pulled the Palestinians down from the tree of preconditions [to resuming talks]; I didn't agree to a further freeze of building in the territories; I refused to release 120 prisoners before the talks and the 1967 borders aren't mentioned."

Israel currently has the most right-wing, settler-friendly government in its history and a cabinet that openly derides and ridicules any prospect of a Palestinian state. Meanwhile, their "partners" in talks represent only the Palestinian West Bank, leaving the Gaza strip and its residents offset for this critical discussion (the one that's only about having a real discussion - keep up). In such a context, it is hard to see this US-driven peace track as anything more than an enforced holding pattern and one doomed to fail - again. For some time now, talking, aka the "peace process", has been more important than actually reaching a settlement that would end Israel's decades-long occupation of the Palestinian territories.

That is why the new EU guidelines, which affect funding programmes for joint research, education and other projects with Israel, are so striking; it represents a moral victory as a first, long-awaited chink: the day the EU finally stood up to Israel and backed up long-stated principles with concrete policy.

As Sam Bahour, a Palestinian-American business development consultant living in Ramallah, explained: "It is too little, too late, but I do think that it is ground breaking. That's because it synchronises with all the talk we've been hearing for the past 20 years, including the EU's own reports, showing the illegality of Israel's actions on the ground." Indeed EU officials themselves have stressed that the guidelines only underline what has been a stated EU position on Israeli settlements in East Jerusalem and the West Bank - deemed illegal under international law.

This late alignment of principles with practice is thought to be a sign of the EU losing patience with Israel and its disregard for international law. Just before the guidelines emerged, veteran Israeli journalist Akiva Eldar wrote of the EU's rising sense of mistrust and disappointment as Israel continued to raze Palestinian projects in the West Bank built with European aid money - projects for solar panels, clinics and kindergartens. Catherine Ashton, the EU's foreign policy chief, was also infuriated by Israel's continued blanking of her request to stop forced-eviction notices and home demolitions for Palestinians living in Area C, the part of the West Bank under complete Israeli control. Assessing the new guidelines, Eldar said: "The Israeli government didn't take the Europeans too seriously and crossed over from just ignoring them to humiliating them. "

There are now some 520,000 Jewish settlers living in the Palestinian West Bank and East Jerusalem, while settlements construction currently runs at a seven-year high. The settlements' project - and the military apparatus that enables it - is by far Israel's biggest and longest-running national project, diverting a size of the national budget that remains a mystery because settlements funding is so diffuse, cross-departmental and opaque.

The new EU guidelines don't affect trade - the EU is Israel's largest trading partner - and it is not clear how much of a financial hit on settlements the new guidelines represent. When the Israeli government convened an emergency meeting following the EU's announcement, some attendees spoke worryingly of adverse effects on the economy, academia, sports and culture.

But far more important is the potential of a turning tide on Israel. As Mr Bahour explained: "No one issue going to bring the occupation to end. But the incremental holding of Israel to account is going to have a cumulative significance - and the goal now is to allow this to gain traction".

Mr Bahour thinks that the EU-wide guidelines could give a green light for countries to take similar actions on an independent basis. Or, there could be more such coordinated directives: Ms Ashton has already indicated that, in line with the EU's opposition to settlements, she expects comprehensive guidelines on labelling settlement products to be produced by the end of this year.

The peace talks may or may not achieve results. But in terms of brokerage, perhaps Europe is finally overtaking the US in clout and potential for real, meaningful change in the Middle East.

Rachel Shabi is a journalist and the author of Not the Enemy - Israel's Jews from Arab Lands

On Twitter: @rachshabi