Israel’s Minister of Foreign Affairs issued Tuesday a bleak report to its envoys and missions around the world in a one and a half page special diplomatic cable signed by Foreign Ministry deputy-director general Gilad Cohen, warning of worsening sanctions and boycotts that will pose a serious threat to the Israeli economy.
The paper also warned of a probable nuclear agreement with Iran, leaving Israel alone and vulnerable. The sanctions were described as damaging to Israel’s infrastructure, military, and economy.
According to the cable the assessment in Jerusalem is that “American influence is succeeding at the present in delaying practical decisions [against Israel] until after the election. Nevertheless, in light of the systematic Palestinian policy to move the conflict to the UN, there is no guarantee that the US will continue to use its veto after the elections.”
The Foreign Ministry also addressed the volatile situation in the Middle East. “There are additional, significant, ongoing processes happening in the region, such as the armament of the terror organizations Hamas and Hezbollah, who are developing their abilities and improving them significantly. The terror organizations are working to improve their accuracy, as well as strengthening their abilities in unmanned aerial vehicles. Israel’s handling of these threats is not unconnected to events in the Palestinian arena.”
Regarding nuclear negotiations between world powers and Iran, the document states: “The Foreign Ministry is preparing for the possibility that negotiations will end in the first half of 2015 with a bad agreement, which Israel would be alone in opposing.”
The cable warned of a number of punitive economic actions that might be taken against Israel: “We need to pay attention to internal processes in Europe and to possible consequences of the future of the European Union, as well as to trends of extremism and the rise of the radical right- and left-wings, the anticipated elections in Greece, and the elections in France in 2017 – all of which could put an end to the special ties with Israel. The Europeans are clearly creating a link between their diplomatic relations and their economic ones, and it is worth remembering that Europe is Israel’s primary trade partner. This deterioration (in relations) is reflected, among other things, in independent French activity, including at the UN Security Council, and in the heightening of negative signals sent to Israel.”
Other concerns addressed in the cable were security issues, such as a decrease in security imports and supply of replacement parts to Israel. In recent years, Britain, Belgium and Spain have all halted shipments of weapons to Israel, citing concerns that the arms would be used in violation of international law.
The European Union is also expected to demand compensation from Israel for damages it allegedly caused to projects in the West Bank and East Jerusalem. European aid organizations are running numerous Palestinian civilian projects and the Foreign Ministry is concerned that these organizations will now demand compensation if the projects are damaged due to IDF activity.
Israel’s infrastructure is also at risk. After companies from Germany and the Netherlands withdrew from projects to lay rail tracks and construct of water and sewage treatment facilities in Israel, other companies could also drop future projects, hurting the planned upgrades of Israel’s infrastructure.
The concern also extended into the private sector. In recent years, leading banks and investment and pension funds in Denmark, Norway, Ireland and the Netherlands have decided to halt cooperation with financial institutions in Israel that operate in the territories, and stop investing in Israel. The Finance Ministry is concerned more financial institutions will follow suit and divert millions of dollars into alternative investments.
The BDS movement against Israel could also escalate. Universities in Europe and the United States are expected to push for a halt in cooperation with Israeli academic institutes.
On December 24, in a Tel Aviv speech, Liberman – presenting himself as a representative of the pragmatic camp, as opposed to the utopian Left and the “extreme fanatical national camp that ignores reality” – said there was a direct connection these days between economic and diplomatic relations.
“We are seeing how the changes in relations between states influence the economy,” Liberman said in that speech. Therefore, when I speak about economics and policy, we have to understand that our biggest market, both import and export, is Europe. We cannot ignore that fact.”
Among the sanctions that Europe may impose, according to the Foreign Ministry cable, are boycotting goods from the settlements; restricting military exports to Israel, including the export of spare parts; the divestment from Israel by major European financial institutions; and the refusal of large European companies to take part in massive Israeli infrastructure projects. In addition, the cable warns of the possibility of increased academic boycotts, a movement on campuses referred to by the acronym BDS.