Conference on the full integration of Israel in the EU
European Parliament, Brussels, 4-6 March 2002

WHY SHOULD ISRAEL BECOME A MEMBER OF THE EUROPEAN UNION?
A STRATEGIC PERSPECTIVE (ABSTRACT)

Alfred Tovias
Walter Rathenau Professor
In European Economics
And
Jean Monnet Chair
The Hebrew University

The EC has been since its creation the first trading partner of Israel. This economic relationship only deepened with the successive Enlargements of 1973, 1981 and 1986 and the conclusion of increasingly complex trade agreements (1970 and 1975). But if until the end of the 1980s , Israel could set itself as a strategic aim to deepen its economic integration with an emerging trading block, this is not enough since 1989. The strategic changes which have been taking place since then both in Europe and in the Middle East call not only for the economic but also the political integration of Israel in the European Union, i.e. membership.

Economically the EC has evolved since the early 1990s into a real Single Market for goods, services, labour and capital and then on into a Monetary Union since 1999. This quantum-change in the level of economic integration is bound to discriminate whether intentionally or non-intentionally to whoever stays out of the area of integration. But this is particularly grave for countries in the EU's outside periphery and with strong economic links with it, such as Israel.

Economically as well, Israel has become a post-industrial country based on the development of high tech and services, very much alike advanced EU countries. Demographically , large-scale immigration from the ex-Soviet Union has transformed Israel into a European-type society, much less identified with Middle Eastern societies than only a decade ago.

However it is in the political realm, where there have been changes in the last decade equivalent to real earthquakes:

1. The Cold War is over , the Soviet Union has collapsed and Germany has been peacefully reunified.

2. Most of the neutral European countries, after some hesitations, have decided to join the EC, since 1992 known as the EU.

3. All countries of Eastern Europe, three Baltic and three Mediterranean countries (Turkey, Cyprus and Malta) have become candidates for membership in the EU , with some of them expected to join as soon as 2004.

4. The Peace Process in the Middle East starting after the Gulf War and betting on the emergence of a New Middle East has collapsed. Even assuming that peace between the Israeli and Palestinian people is achieved, the idea of a New Middle East is not welcomed by Egypt. Moreover, scientific and other empirical evidence shows that an economically-integrated Middle East cannot replace economic ties of Israel, Turkey or Cyprus with the EU.

5. The Euro-Mediterranean Partnership (EMP) launched in 1995 , at the height of the Oslo Process and the Algerian crisis, was conceived by the EU with the economic needs of Arab countries in North Africa in mind and on the assumption of a New Middle East emerging with the help of Europe. Not surprisingly, neither Turkey nor Cyprus saw in the Partnership an alternative to membership. The latter is the real thing , the former a side-show. Most Israeli experts think that this applies to Israel as well.

6. This author thinks as well that the Partnership is badly conceived and that sooner or later it will derail , be suspended or transformed into something coming close to the failed Euro-Arab Dialogue of the 1970s (which included Gulf countries).



Therefore now is the time to rise the issue of future Israeli membership in the EU. Let the latter state if this is at all conceivable and let it state under what conditions. The geographic argument shall not stand in the way because other countries which do not belong to the European continent (such as Cyprus) are being considered for membership. Adjusting to the acquis communautaire should certainly not be more difficult for an economically-advanced country such as Israel than for Turkey or Poland, not to speak of Bulgaria. All experts concur that Israel could have been an OECD member for years had it not been for political reasons. Israel would be a net donor in budgetary terms in a EU including the current 13 candidates. Contrasting with their case, integrating Israel in the EU would not require from the latter pre-accession aid. Given their relative factor endowments, both the EU and Israel would undoubtedly benefit from Israel's incorporation in the EU system of intra-industry trade.

Politically, Israel's membership in the EU would improve its security. Contrary to what some may think , the US would support it, as it has supported entry into the EU of other close allies such as Britain or Turkey. Membership would help to diminish Israel's strategic and financial dependence on the US. Israel is a "virtual" member of NATO. Entry into the EU could be coupled with entry into NATO, something of interest to the US, the EU and Israel alike.




Jerusalem, February 26 2002