A spokesman for German Chancellor Angela Merkel said on Monday she supports labeling of Israeli settlement products from the disputed territories of the West Bank, east Jerusalem and Golan Heights.The spokesman told The Jerusalem Post that Merkel supports a German Foreign Ministry statement from Friday backing a European Union decision of last month to affix such a label to such items appearing on store shelves. The decision “does not deal with a stigmatized warning decal, as many have presented… What Brussels wants is, however, only a clear designation of the origin of the products,” the spokesman said.The remarks were a significant setback for the Israeli government, which had sought Germany’s help in convincing EU member states to reject implementation of labeling. It also contrasted with the spirit of close ties as the countries were winding up a year of events marking 50 years of diplomatic ties.Merkel has repeatedly stressed her opposition in interviews and statements over the last year to boycotts of Israel, but has declined to offer a specific view on the labeling measure.The Merkel administration has said “there will not be an Israel boycott in Germany” and “Israeli products will, of course, continue to receive preferential market access.”Prime Minister Benjamin Netanyahu told German President Joachim Gauck when they met in Jerusalem on Sunday of Israel’s opposition to last month’s EU decision about labeling, a decision Germany now appeared to be adopting.Knesset Speaker Yuli Edelstein criticized the German Foreign Ministry’s support for the labeling policy when he met with Bundesrat President Stanislaw Tillich in the Knesset on Monday.Edelstein said it is unfortunate Germany’s Foreign Ministry is backing the policy.Tillich responded that he also wondered at the wisdom of the decision.Edelstein, referring to a Berlin visit last week, which included a meeting with Merkel, said German counterparts seemed surprised by the Israelis “not-always- diplomatic” attitude on the subject of labeling.“It’s a very sensitive topic for us, boycotting products because of their source,” Edelstein said he had told them.“I told my German colleagues: If we decide to follow the [logic of the] decision and get rid of the Golan Heights, to who in Syria would we give it? None of the German leaders knew what advice to give me on the matter,” Edelstein said.Edelstein was happy though that his German counterpart, Bundestag President Norbert Lammert had called the EU directive unwise.The MKs who accompanied Edelstein to Germany last week voiced anger at the latest decision.MK Tali Ploskov (Kulanu) said the move “serves anti-Semitic interests. Don’t tell us stories. Product labeling is meant to allow boycotts of Israel. It’s unfortunate that these people do not understand that harming factories in Judea and Samaria will bring serious harm to the Palestinian population, since most of the workers in these factories are Palestinians who support thousands of families.”MK Yoel Hasson (Zionist Union) said that labeling is not an effective way to bring about negotiations between Israel and the Palestinians.MK Nachman Shai (Zionist Union) said: “As we said on the visit to Germany, whoever starts labeling products will end up labeling people. The discriminatory and audacious decision must disappear.”Shai was among the initiators of a discussion in the Knesset Economics Committee about labeling on Monday, along with MKs Anat Berko (Likud), Aliza Lavie (Yesh Atid) and Aida Touma-Sliman (Joint List), who is in favor of the EU policy.Lavie criticized the government’s responses to attempts to boycott Israel.“There are too many ministries that are supposed to take care of the matter. The country is confused and the topic isn’t taken care of when we don’t have a Foreign Minister or an Economy Minister,” Lavie said.Foreign Ministry Department for European Organizations manager Avivit Bar-Ilan said the ministry had a part in convincing the EU to delay the decision since 2012.Asher Friedman, the coordinator for fighting BDS in the Strategic Affairs Ministry, said their office had just received a new director- general and a NIS 100m. budget to deal with the issue.“Sometimes it’s hard to handle the hypocrisy towards Israel,” MK Ayelet Nahmias-Verbin (Zionist Union) said.MK David Bitan (Likud) warned that soon all Israeli products will be labeled, and urged the government to address the issue diplomatically, with individual European countries.MK Michal Rosin (Meretz), however, said that other lawmakers’ unwillingness to separate settlements from the rest of Israel and “the continued occupation harms the Zionist interest and the continued existence of Israel as a home for the Jewish people.”Germany’s Justice Minister Heiko Maas told Justice Minister Ayelet Shaked on Monday he is “skeptical about the decision to label products of the settlements” by the EU.Shaked called the EU decision hypocritical.She also complained to Maas that, “the EU has not decided on this step of labeling products in any other place. We expected that Germany would stand by Israel’s side.”Shaked added that “only last week, we experienced the effect of labeling products when the KaDeWe supermarket decided to remove settlement products from its shelves. We see that the step of labeling products leads to a boycott.”Not pulling any punches, Shaked also accused Germany of providing funds to help certain groups seeking to prosecute Israelis at the International Criminal Court in the Hague for alleged war crimes related to the 2014 Gaza war and for settlement building.“There is a need to stop this funding,” Shaked said.Shaked also urged Germany and the West to avoid too close an alignment with Iran, while dealing with the crisis in Syria.“I expect that the Western countries will not change what is left of Syria into an Iranian agent. Israel views Iran’s involvement in Syria gravely,” she said.Prof. Gerald Steinberg, president of NGO Monitor, called labeling a first step toward boycotting Israel.“Powerful ‘humanitarian’ groups are preparing to target not only Israeli banks with branches over the Green Line, but any bank that provides a mortgage for a home in east Jerusalem, the West Bank or the Golan Heights,” Steinberg said. “This attack is already in the pipeline.”Merkel’s foreign policy spokesman in the Bundestag, Jurgen Hardt, had spoken against the EU measure last month, charging that it stigmatized Israel.“In view of the background of a movement hostile to Israel, which seeks to boycott products from the settlements, the EU measure is false, ” Hardt had said.Lammert a member of Merkel’s Christian Democratic Union party, said last week that “Germany not only didn’t agree to the [EU] decision, it rejected it.”A spokeswoman for the Israeli Embassy in Berlin said she could not immediately respond about Merkel’s position.Netanyahu had denounced the EU directive of last month as “hypocritical and (setting) a double standard.”Israel’s National Infrastructure, Energy and Water Minister Yuval Steinitz called the measure “anti-Semitism in disguise."