Prime Minister Binyamin Netanyahu is to decide early next week whether Israel will negotiate with the EU over participation in the lucrative Horizon 2020 program, or refuse to enter the talks until disagreements over the newly published EU settlement guidelines are resolved, The Jerusalem Post has learned.

The technical/professional talks with the EU over the 80 billion euro project are expected to begin on August 14.

Israel has not yet decided whether to participate in the negotiations and try to settle disputes over the new EU guidelines during those talks, or to refuse to participate until questions over how the territorial clause in the future agreement will be phrased.

A meeting on the matter with Netanyahu is scheduled for early next week.

A decision to stay away from the talks would be a signal that Israel will not return to business as usual with the Europeans until the issue is resolved, a diplomatic official said.

The guidelines in question prohibit any EU funds in the form of grants, prizes and financial instruments from going toward Israeli entities beyond the pre-1967 lines, and also mandate that any future agreements with the EU incorporate a territorial clause stipulating that the West Bank, east Jerusalem and the Golan Heights are not part of Israel.

Israeli officials said that although they were not expecting the EU to roll back the guidelines, it is up to the European body – since it put the issue on the agenda by codifying the guidelines – to find a solution that will enable further EU-Israel cooperation.

Horizon 2020 is the EU’s innovation flagship program, meant to create jobs and fuel economic growth. Israel is the only non-EU country that has been asked to join as a full partner, and is expected to pay some 600 million euros over the next seven years to take part. This is considered a worthwhile investment, because for every shekel Israel contributes, it is expected to get back NIS 1.5 in research funds and other inbound investments.

Israeli officials, such as Science, Technology and Space Minister Yaakov Peri, have said that a failure to participate in the program would cost Israel dearly in lost R&D funds. European officials, such as Elmar Brok, chairman of the European Parliament’s Foreign Relations Committee, have said that Israel’s refusal to participate would harm European interests because it would lose out on Israel’s cutting-edge innovation and technology.

Israeli officials said EU foreign policy chief Catherine Ashton may have signaled an indication of a willingness to find a resolution to the problem, in her statement Wednesday welcoming the resumption of Israel-Palestinian negotiations.

“The resumption of talks opens new doors both for developing further the EU’s contribution to peace and security in the region and for deepening our relations with both parties,” Ashton said.

“When the Lady Ashton speaks of opening new doors, we believe this is a welcome allusion to a review, and maybe even a freeze, of the recently published EU guidelines regarding settlements,” one diplomatic official said.

“If that is to be confirmed, it would be a most productive and welcome move in support of peace talks and of EUIsrael partnership.”

Last week, Defense Minister Moshe Ya’alon – presumably after coordination with Netanyahu – responded to the new guidelines by ordering the IDF’s civil administration to cease cooperation in joint projects with the EU in Area C of the West Bank.

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