US Secretary of State John Kerry warned yet again over the weekend that Israel would suffer if its leaders failed to reach a peace agreement with the Palestinians.
“Today’s status quo, absolutely to a certainty, I promise you 100 percent, cannot be maintained. It is not sustainable. It is illusionary. You see, for Israel there is an increasing delegitimization campaign that has been building up. People are very sensitive to it. There is talk of boycott and other kinds of things. Are we all going to be better with all of that?” Kerry said in Munich.
In the past, Kerry has also warned that if the present negotiations fail, Israel would face isolation and that this might be the last chance for peace. In November, Kerry sparked controversy when he predicted the outbreak of a third intifada unless a peace agreement was reached.
Many on the Right were quick to lambaste Kerry.
Economy Minister Naftali Bennett said Kerry should be supporting Israel rather than encouraging boycotts against it. Construction and Housing Minister Uri Ariel questioned whether Kerry was a fair mediator. Deputy Foreign Minister Ze’ev Elkin and Intelligence Minister Yuval Steinitz argued that Kerry was actually making peace harder to achieve because his comments encouraged the Palestinians to strengthen their demands.
Singling out Israel for special censure is problematic, however, because the underlying assumption behind economic boycotts is that Israeli policy – not Palestinian incitement, extremism and intransigence – is the sole factor to be blamed for the present stalemate. On the other hand, reports coming out of the Palestinian press Sunday claimed that the PA felt it was also being pressured unfairly by Kerry.
The US secretary of state is not the only one warning of negative ramifications if Israel does not resolve its conflict with the Palestinians. Last week Finance Minister Yair Lapid warned during a speech at the Institute for National Security Studies that “if the negotiations with the Palestinians stall or collapse and we enter the reality of a European boycott – even if it’s extremely limited – the Israeli economy will falter and every Israeli citizen will feel the pain directly.” Lapid’s forecast was based on a special study prepared at his request by the Treasury.
A group of about 100 leading Israeli businesspeople called Breaking the Impasse agrees with Kerry and Lapid.
Businessman Benny Landa, a member of BTI and known as the father of digital offset color printing, said Sunday that exporters like himself were particularly attuned to the potential economic fallout if Israel fails to resolve the conflict with the Palestinians.
Pessimism regarding Israel’s geopolitical standing is not based solely on doomsday forecasts. In recent days there have also been concrete actions taken by some members of the European business community that do not bode well for Israel’s economic future.
Sweden’s Nordea Bank – the largest in Scandinavia – and Denmark’s Danske Bank – that country’s largest – have both taken steps against Israeli banks involved in construction in the settlements. On its website, Danske Bank said it was boycotting Bank Hapoalim for “legal and ethical reasons.” Nordea Bank, meanwhile, has asked for clarifications from Bank Leumi and Mizrahi- Tefahot Bank regarding their activities beyond the Green Line.
Seen in a broader context, Kerry’s comments should be taken seriously. While the US secretary of state definitely has a political agenda (pushing the sides toward an agreement), and while it is true that America tends to have more sway with Israel than with the Palestinians due to the two countries’ close ties and shared values, Kerry’s analysis of the potential economic ramifications that await Israel should it fail to resolve the conflict is not detached from reality.
At the start of the weekly cabinet meeting on Sunday, Prime Minister Binyamin Netanyahu stated that no pressure, including economic boycotts, will force him to compromise the State of Israel’s vital interests, “above all the security of the citizens of Israel.”
Nonetheless, a two-state solution is a cardinal Israeli interest, not because it would help us avoid an economic boycott, but because it avoids the consequences of a one-state, binational arrangement that would undermine Israel as a Jewish and democratic country.