International attention is consumed by Russia’s war in Ukraine, but tensions are flaring in the Middle East too, with escalatory potential. Israeli and Palestinian politics are in crisis, extremism is flourishing on both sides, and violence is escalating. This week and next are particularly febrile, as Passover and Ramadan collide, setting the stage for tensions between Muslim and Jewish worshippers at the Temple Mount/Haram al-Sharif in Jerusalem. Eighty-one Palestinians and fourteen Israelis have already been killed in 2023, as of the end of March, according to the UN Office for the Coordination of Humanitarian Affairs.1 The European Union (EU) should be careful not to neglect the region.
In December 2022, Benjamin Netanyahu, Israel’s longest-serving prime minister, formed the most far-right government in the country’s history. He has handed extremist ethno-nationalist politicians senior ministerial portfolios and powers on some of the most sensitive issues in the Israeli-Palestinian conflict, including leadership of the military and the police. Netanyahu’s government has an expansionist agenda for the West Bank and is pursuing more confrontational policies toward Palestinians, instating punitive measures and employing bellicose rhetoric that has provoked an aggressive response from Palestinian militant groups. His coalition’s ambitious “judicial reform” agenda to strengthen political control of the judiciary is driving polarization in Israel, drawing hundreds of thousands of protesters to the streets every week, at times resulting in clashes with police, in what some commentators have called the “Israeli Spring.”
For its part, the Palestinian Authority (PA) under President Mahmoud Abbas has little popular legitimacy. In a March poll, just 19 percent of Palestinian respondents said they were satisfied with Abbas’s performance, and for the first time, a majority of Palestinians said that the dissolution or collapse of the PA would serve the interest of the Palestinian people (52 percent). Now, the PA’s security forces have lost their grip over the northern West Bank, enabling militant groups to flourish. Meanwhile, the Palestinian leadership remains deeply divided between the PA in the West Bank and de facto Hamas government in the Gaza Strip.
The EU needs to rethink its approach to Israel and the Palestinian territory in light of these twin deteriorations. Israel and the PA have been moving in illiberal directions for years, but the EU has never adjusted its policy. Instead, it has deepened its ties with Israel despite the emerging one-state reality and the country’s widening democratic deficit. Meanwhile, the EU and its member states have poured funding into the supposed kernel of a Palestinian state, regardless of the PA’s democratic backsliding, corruption, and repression of popular dissent. Further, Europeans have entrenched the Palestinian political divide by maintaining a no-contact policy toward the Hamas de facto government in Gaza, after designating Hamas as a terror organization.
The limits of the EU’s foreign policy appetite and ability regarding Israel-Palestine are well known. Like the United States and others, the EU has long been paralyzed by the quiet recognition that the two-state vision is vanishing, while being unable to formulate an alternative approach. It is difficult to envisage any shift in policy that could attract a consensus among member states, which are divided on Israel-Palestine due to a potent mix of economic, energy, and security and defense interests. In addition, much of Europe’s foreign policy attention is now consumed by the war in Ukraine. The Israeli-Palestinian conflict, in contrast, is regarded as relatively well-contained and not a major threat to European interests.
However, this assumption should be examined given the control of key portfolios by far-right Israeli politicians, their agitation for a more aggressive policy toward Palestinians, and Netanyahu’s reliance upon them because of the corruption trial hanging over him. Further, the fragility and illegitimacy of the PA has left room for militant groups to increase their presence in the West Bank, and the unresolved rift between Abbas’s Fatah and Hamas in Gaza has further fragmented and weakened the Palestinian political leadership.
Israeli Democracy Under Threat
Israel and its allies often proudly refer to the country as “the only democracy in the Middle East.” Indeed, Israel was deemed the only “flawed democracy” in the region in the Economist Intelligence Unit’s 2022 Democracy Index. (That was the case before Netanyahu returned to power and proposed the judicial overhaul.) Israel is ranked above numerous EU member states including Hungary and Poland, as well as the United States. However, such ratings do not take into consideration Israel’s enduring occupation of the West Bank and Gaza and its control over the 5.4 million Palestinians there. Taking Green Line Israel in isolation, the Democracy Index shows a gradual upward trajectory from 2006, followed by a stabilization in recent years. A slight deterioration occurred in 2022, reflecting the end of the previous coalition government—which, for the first time in the country’s history, included Palestinian citizens of Israel—and the election of the new far-right government led by Netanyahu.
The illiberal foundations of Israel’s new government have been laid over decades. Successive right-wing governments have unsuccessfully sought to weaken the Supreme Court, which they regard as a curb on their legislative ambitions; introduced discriminatory legislation; and suppressed dissenting voices from Israeli and Palestinian civil society.
Today, Israel is in the throes of a democratic crisis. Upon his return to power, Netanyahu brought with him a coalition of far-right, religious parties and a judicial reform agenda to weaken the Supreme Court and increase political control over the judiciary. The proposed judicial overhaul may serve Netanyahu by curtailing legal proceedings against him on charges of corruption.
Indeed, a law has already been passed that dramatically raises the bar for declaring a prime minister “incapacitated,” undercutting the role for Israel’s attorney general. Two of the coalition’s priority laws, which would give the ruling coalition control over judicial appointments and prevent the Supreme Court from intervening in ministerial appointments are at advanced stages of the legislative process. Other laws at various stages would dramatically curtail judicial oversight, for instance by allowing the Knesset to override Supreme Court rulings by a simple majority (the ‘override clause’), as well as allowing ministers to install political appointees as legal advisers. These changes would undermine the separation of powers between the legislature and the judiciary and curtail the only check on legislative and executive power.
The government’s proposals have widened the chasm in Israel between those who would prioritize the country’s democratic character and those its Jewish. They have generated anger from a broad swathe of the Israeli public—including Netanyahu’s supporters —the judiciary, the opposition, the security establishment, and the country’s allies and its diaspora, who view the proposals as a dangerous challenge to Israel’s democratic credentials. In a January poll, half of Israeli respondents said that democratic government is in “grave danger.” Responding to the civil unrest, the typically circumspect Israeli President Isaac Herzog warned that the country is “marching into the abyss” and is on “the brink of a constitutional and societal collapse” and a “real civil war.” His attempt at reaching a compromise proposal was initially rejected by Netanyahu and his government.
Tensions reached their apex during the week of March 27, when Netanyahu fired defense minister Yoav Gallant after he called to pause the overhaul. (However, Gallant remains in the post.) That prompted furious nighttime protests and a strike by Israel’s labor union and business leaders, which shuttered the country’s airport and ports. With pressure mounting from within his party, Netanyahu was forced to cede a temporary halt to the legislation and enter into dialogue with the opposition, though he still promised to deliver the overhaul. Significantly, to prevent defections from his coalition, Netanyahu agreed to establish a national guard to tackle “nationalist crime” and terrorism that could be controlled by far-right minister for national security, Itamar Ben Gvir (of the Jewish Power party), who has been convicted for supporting a far-right terror organization and for inciting violence in 2007. Critics have said the national guard would be tantamount to a publicly funded private militia that would target the Arab Israeli population.
While Netanyahu may have reached a fragile ceasefire, the conflict will resurge once the Knesset returns to sit on April 30. Negotiations have begun, but opposition members are skeptical about the authenticity of the process. Given the zeal of Netanyahu’s coalition partners and his own justice minister for the judicial overhaul, it is difficult to envisage any meaningful compromise that could be reached without collapsing the government. Meanwhile, the protests will continue.
Israel’s democracy is particularly fragile given its lack of a formal constitution, bill of rights, second parliamentary chamber, and any devolved power. In addition, the legislature is controlled by the ruling coalition. The proposed reforms would allow laws to be passed that previously would have been struck down by the Supreme Court for infringing on basic rights or the rights of minorities, which are protected under the Basic Laws. (The Basic Laws have quasi-constitutional status.) That is of particular concern given the hostile positions taken by members of the government on minority groups, including Palestinian citizens of Israel, refugees and migrants, and the LGBTQ community. While Israel’s Supreme Court has often failed to safeguard Palestinians’ basic rights, the absence of judicial review over decisions relating to Palestinians would be detrimental and could allow unbridled de facto annexation.
Israel’s longstanding military occupation and control of Palestinians living in the West Bank and Gaza, without full civil and political rights, is driving the democratic deficit in both polities. With the expansion of settlements in the West Bank and the application of Israeli laws there, a one-state reality of unequal rights is emerging, where an increasing number of Israeli settlers and Palestinians live next to each other under two separate legal systems: Israelis under Israeli law and Palestinians under Israeli military law (as well as Jordanian law).
Further blurring the Green Line, Netanyahu has transferred responsibility for two crucial military bodies that handle civilian affairs in the Palestinian territory for Palestinians and Israeli settlers to Bezalel Smotrich, the leader of the far-right Religious Zionist Party who is also a settler with an explicitly annexationist agenda. The government’s declared basic principles assert an “exclusive and inalienable” Jewish right to live in “the Land of Israel,” defined as including “Judea and Samaria” (the Jewish biblical term for the West Bank). The coalition agreement reached with the Religious Zionist Party promises “extending sovereignty over Judea and Samaria”—that is, de jure annexation—subject to “Israel’s national and international interests,” a potentially restraining factor.2 The government has already begun to implement its agenda of settlement expansion, authorizing ten settlement outposts, approving more than 7,000 new settlement units, and legislating to allow the return of settlers to four West Bank settlements that were evacuated in 2005.
Palestinian and Israeli civil society organizations that oppose government policies may also be suppressed under the new coalition. Smotrich, who is also minister of finance, recently described human rights organizations as “an existential threat to the State of Israel,” concluding that “the government has to deal with them.” The government may designate more Palestinian organizations as “terror organizations,” beyond the six already designated under the previous coalition, and use counterterrorism legislation to curtail the activities of Israeli civil society organizations that continue to work with designated Palestinian organizations. It may also seek to build upon past legislative steps against Israeli civil society organizations by, for instance, introducing taxes on foreign governmental donations, a move promised in the Jewish Power-Likud coalition agreement.
Israel’s illiberal trajectory is not only a problem for Israelis and Palestinians; it also has far-reaching external implications. An Israeli cyber intelligence company, the NSO Group, has created spyware that has been used against citizens inside Green Line Israel (with a judicial warrant) and the Palestinian territory and that Israeli governments have licensed for export to powers in the region such as Saudi Arabia and the United Arab Emirates, as well as to EU member states with poor democratic track records, such as Hungary and Poland, and to the United States.
A New York Times investigation asserted that earlier Israeli governments led by Netanyahu leveraged the spyware as a diplomatic tool, noting that Pegasus was licensed to Bahrain and the United Arab Emirates in advance of them signing the Abraham Accords in 2020 and that countries including Mexico and Panama shifted their UN voting patterns in favor of Israel after acquiring the spyware. The NSO Group has also admitted to exporting spyware to fourteen EU member states’ governments under export licenses issued by Israeli governments. According to a European Parliament investigation, the governments of Greece, Hungary, Poland, and Spain used the NSO Group’s products to illegally spy on journalists, politicians, and civil society actors. In the United States, the Federal Bureau of Investigation (FBI) purchased and tested Pegasus in 2018 but did not use it. And, in a volte-face, the Joe Biden administration blacklisted the NSO Group in 2021.
Palestinian Democratic Decline
The PA in the West Bank and the Hamas de facto government in Gaza are authoritarian regimes, according to the Economist Intelligence Unit’s 2022 Democracy Index. The Palestinian territory’s score has declined since 2006, when it was labeled a flawed democracy.
Democratic deterioration in the Palestinian territory is not taking place under the same conditions as it is inside Israel. The Palestinian democratic deficit is driven by Israel’s occupation, which has skewed the PA toward meeting Israel’s security needs, impaired its ability to govern or to hold elections, and stifled Palestinian civil society. Under the Oslo Accords, the PA committed to maintain security in areas under its control (Area A),3 act systematically against all expressions of “violence and terror,” and coordinate with Israel in meeting this obligation. The security coordination with Israel has fostered an image among Palestinians of the PA as the subcontractor for the Israeli occupation, harming the PA’s legitimacy and weakening its control. This has also undermined the very security and stability that Israel and international actors seek to shore up. Notably, in a March poll, 68 percent of the Palestinian public (71 percent in the Gaza Strip and 66 percent in the West Bank) said they support forming militant groups such as the Nablus-based Lions’ Den, while 87 percent said the PA has no right to arrest members of militant groups to prevent them from attacking Israelis or to provide them with protection from assassination by Israeli security forces.
The EU should not be interested in maintaining the PA at all costs for the sake of the status quo and of an artificial sense of stability. Indeed, 2022 transpired to be one of the deadliest years for West Bank Palestinians, with 151 killed, as PA security forces lost their grip and Israeli incursions into PA-controlled Area A increased. European countries should ensure their diplomatic and financial support creates a more legitimate and effective PA that has functioning institutions and the ability to represent the people, which will in turn foster genuine stability.
Decisions by the PA leadership have deliberately eroded democratic progress, specifically with regard to the rule of law, institutional governance, and basic legal rights. Abbas has consolidated his control over the three branches of government, eliminating separation of and checks on their powers. There have been no elections since 2006, the executive controls the judiciary, the president effectively suspended the parliament in 2007 and instead rules by decree, and corruption is rife. In 2021, Abbas cancelled planned elections using the fig leaf of Israel preventing elections in East Jerusalem. The PA has also cracked down on its opponents and civil society. One incident that caused horror was the death of Nizar Banat in 2021, a Palestinian activist and vocal critic of the PA, after he was arrested and assaulted by Palestinian security forces.
Further, Abbas has refused to work toward any meaningful reconciliation process with the Hamas de facto government led by Yahya Sinwar in Gaza. A March poll had support for Fatah (35 percent) and Hamas (33 percent) neck and neck across the Palestinian territory. Therefore, it is difficult to envisage a legitimate PA without Hamas representation. Without democratic channels of expression, discontent is likely to spill over into violence. It is no coincidence that a major Gaza-Israel conflagration took place after Abbas cancelled the scheduled elections in 2021.
EU Policy Paralysis
EU policymaking regarding Israel has long been paralyzed by internal disagreement as well as some member states’ sensitivity around adopting a more coercive approach. Economic, energy, and security and defense interests have trumped other considerations. Officials interviewed by the author indicated that the EU and member states will seek to preserve the relationship with Israel under almost any circumstances. Netanyahu has forged alliances with the Visegrád Group (V4) counties—Czechia, Hungary, Poland, and Slovakia—in particular with Hungary’s populist prime minister, Viktor Orbán, as well as with Cyprus and Greece. These alliances have paralyzed the Foreign Affairs Council, preventing any new conclusions since 2016. Thus, the EU has largely relied on releasing diplomatic statements condemning Israeli actions rather than taking any substantive steps.
The EU is the PA’s top donor, though its overall assistance to the Palestinian territory has declined in recent years.4 Between 2007 and 2022, the EU invested €750 million in the PA, Palestinian government, and civil society, while EU member states spent around €1.83 billion between 2007 and 2021. However, the EU and member states have not adequately leveraged that assistance.
EU policy towards the PA has been contradictory. European countries say they support Palestinian democracy, but they have continued providing diplomatic, trade, and aid support to a visibly dysfunctional and undemocratic authority. And while the EU has loudly voiced support for elections, it has not been willing to publicly promise to respect the outcome of any free and fair elections for fear of a strong showing for Hamas. The stability-versus-democracy dilemma drives this behavior, with the EU and member states prioritizing the former while claiming to support the latter. For instance, the EU has declined to exercise the conditionality in its funding to the PA to ensure democratic progress for fear of undermining Abbas, the PA, and, most importantly, PA-Israel security coordination.
Further, the existence of a nominal PA has allowed foreign governments to claim there is still a vision of an eventual Palestinian state within the two-state paradigm. It has also allowed Israel and its allies to deny the existence or emergence of a one-state reality. In the words of one European diplomat: “If you question the PA, then you have to unravel the whole Oslo setup, which everyone has informally agreed is becoming less and less relevant.”5 An EU diplomat said, “symbolically, we cannot terminate funding to the Palestinians.”6
Reshaping EU Policy
Conditionality
The EU should shape its Israel-Palestine policy according to its values. It should then determine and communicate clear incentives or disincentives for policies that support or contradict those values.
The EU has plenty of policy tools at its disposal, but it has little political will to deploy them given burgeoning ties between member states and Israel and rising apathy toward the Palestinians. Therefore, an achievable approach to both polities would involve ensuring agreements are predicated on shared values and are enforced. Such conditions are already embedded in key agreements and Foreign Affairs Council conclusions, such as Israeli participation in the EU program Horizon Europe (2021–2027), or direct budgetary support to the PA and to Palestinian institution-building.[vii] If Abbas continues to prevent elections, European countries could instead support young, future Palestinian leaders by channeling financial assistance to grassroots political movements and civil society organizations. Reconfiguring funding would require the EU high representative for foreign affairs and security policy, currently Josep Borrell, and a coalition of willing member states to build support for the idea.
Diplomacy
European countries and the United States have been wary of weighing in on what they consider to be internal Israeli affairs. According to one EU diplomat, the bloc is “moving away from colonial lecturing.”7 This mirrors the words of U.S. Ambassador to Israel Thomas Nides, who, when asked if Washington would weigh in on the overhaul of the judiciary, responded that “the Israeli people do not want to be lectured by America.”
European countries have traditionally been more outspoken against Israeli policies than the United States, which strained their relations with Israel but also opened policy space for Washington to operate at times.9 In a reversal of that dynamic, amid recent developments, the United States spoke out more quickly than the Europeans, with Biden referring to U.S.-Israel shared democratic values to the New York Times in February 2023 and a frank phone call with Netanyahu in March. In an extraordinary intervention by a U.S. president, following the pause on the legislation, Biden told reporters that “[the Israeli government] cannot continue down this road. . . . Hopefully the prime minister will act in a way that he can try to work out some genuine compromise, but that remains to be seen.” He added, “I hope [Netanyahu] walks away from [the judicial overhaul].” When asked whether Netanyahu would be invited to the White House, he responded, “No … not in the near term.”
Several European officials have recently spoken out against the proposed judicial reform. Borrell drew the ire of Israeli Foreign Minister Eli Cohen with a March opinion piece. During a special session of the European Parliament on Israel’s democratic trajectory and its implications for the Palestinian territory, Borrell responded to Cohen’s accusations of European interference. He praised Israel for its “vibrant democracy” and said, “With full respect to the internal political dynamics with Israel, this chamber is fully empowered to discuss these dynamics and to understand what happens there with respect to our perception of values and interests in the region.” Borrell reiterated that Israel is a “key partner” with “shared values” that are “based on a democratic and open society and the rule of law. We expect this to continue.” Days later, during Netanyahu’s visit to Berlin, in an uncomfortable joint press conference, German Chancellor Olaf Scholz issued a rare criticism of the Israeli government, commenting, “As democratic value partners and close friends of Israel, we are following this debate very closely and—I will not hide this—with great concern.” The German foreign minister also expressed her concerns in late February.
European officials from all member states should align with U.S. messaging and make clear that relations with Israel are predicated on shared liberal democratic values. Netanyahu has often been characterized as a cautious, risk-averse figure and has typically preferred to form coalitions with an element to his left. Now, without any centrist party in his coalition, Netanyahu will need powers such as the EU and the United States to publicly voice their “red lines,” which he can then use to restrain his far-right coalition partners. But the EU and its member states must also address their own democratic deficits to be credible in this regard. Strikingly, Israelis protesting the judicial overhaul chanted, “Israel is not Hungary” and “Israel is not Poland.”10
The Association Council, established by the EU-Israel Association Agreement of 1995, met in October 2022 for the first time since 2012 after being suspended following tensions over the EU’s policy on Israeli settlements. The council was revived without condition as part of an EU effort, led by French President Emmanuel Macron, to bolster centrist Yair Lapid, who was prime minister at the time, in advance of elections.11 One European diplomat said the EU should “think twice” before continuing to convene the Association Council given the lack of conditionality,12 while another said that an Israeli government explicitly saying what was once unsaid (that is, de jure annexation or rejection of a two-state solution) could provide a basis for a more honest, direct dialogue and force the EU to reckon with that reality.13 The Association Council could provide a forum for privately passing messages to the Israeli leadership. It could also be framed by the EU as an opportunity to deepen relations, making clear that closer ties would be difficult to sustain if Israel acts contrary to the EU’s fundamental values or policies.
On the Palestinian side, European countries should demand frank, higher-level engagement with Abbas. European diplomats indicated that their access to the president was very limited and that their interlocutor, Prime Minister Mohammad Shtayyeh, is not the ultimate decision-maker. Borrell, the president of the European Council, and key member states such as France and Germany should craft a strategy and joint messaging campaign to firmly push for elections, reconciliation, and governance and democratic reform. If Abbas refuses to cooperate, then the EU should apply conditionality measures.
While European countries and the United States have said they are not “boycotting” the extreme-right members of Israel’s new government, the EU and its member states have stuck to their no-contact policy toward Hamas, which has been in place since 2001 for Hamas’s military wing and since 2003 for its political wing. Many European officials privately lament this policy, which impairs their ability to influence and moderate the de facto government in Gaza while entrenching the isolation of the strip. Engaging with Hamas and giving it a formal political stake would lessen the chances of it becoming a spoiler. While the V4 countries and Germany would likely oppose any formal change to the no-contact policy, the EU and its member states could quietly expand technocratic, informal engagement with Hamas.
The EU and its member states should engage regional actors to encourage a more constructive trajectory for Palestinian politics. The EU should promote engagement by Jordan, which is an important conduit to West Bank political elites and has some leverage on Abbas; for instance, Jordan could advance unification among the disparate elements in Fatah for future elections. The EU should also encourage Egypt to maintain its mediation between Israel and Gaza, which is critical for stabilizing the strip. Under current conditions, the possibility of reconciliation is remote, but Egypt could play a critical role should internal Palestinian calculations shift.
Conclusion
In the face of Russia’s war in Ukraine, it may be tempting for European countries to avert their gaze from the Middle East. But the EU must not be a bystander. If European countries continue to pursue old and broken policies, they will see Israel-Palestine descend into significant violence and bloodshed, with the risk of spillover to other parts of the region. A paradigm shift in the EU’s approach may not be imminent given the realpolitik, but there are steps the EU can take to, at the very least, do no harm.
Beth Oppenheim is a policy analyst based in Tel Aviv.
This article is part of the European Democracy Hub initiative run by Carnegie Europe and the European Partnership for Democracy.
This document was produced with the financial assistance of the European Union. The views expressed herein are the sole responsibility of the authors and can in no way be taken to reflect the official opinion of the European Union.
Notes
1 Foreign nationals killed in Palestinian attacks and people whose immediate causes of death or those for whom the perpetrators’ identities remain disputed, unclear, or unknown are not included in the UN data.
2 In the Israeli political system, each coalition party signs a separate agreement with the party tasked with forming a government, which was the Likud party in the most recent election. The agreements are nonbinding.
3 In 1995, the Oslo II Accord agreement divided the West Bank into three areas: A, B, and C. Built-up Palestinian areas were allocated as areas A and B and were handed over to Palestinian Authority (PA) control, with full security and civilian control in Area A and shared security control with Israel in Area B. Area C was placed under full Israeli security and civilian control.
4 Data on historic overall assistance from the EU to the PA is from the PA Ministry of Finance’s monthly reports. Since 2007, overall financial assistance to the Palestinian territory from the EU declined by 60 percent, dropping from €679 million in 2007 to €275 million in 2022.
5 Author interview with European diplomat, January 17, 2023.
6 Author phone interview with EU diplomat, January 5, 2023.
7 According to a July 22, 2014, press release from a European Council meeting, “The EU’s continued support to Palestinian state-building requires a credible prospect for the establishment of a viable Palestinian state, based on respect of the rule of law and human rights.”
8 Author interview with EU diplomats, January 11, 2023.
9 Author phone interview with Martin Konecny (director of EuMEP), February 7, 2023.
10 Protests witnessed by the author in Tel Aviv on April 1, 2023.
11 Author interview with European diplomat, January 17, 2023.
12 Author interview with European diplomat, January 17, 2023.
13 Author interview with EU diplomat, January 11, 2023.
