Might Israel be better off in the EU than allied to the USA?

Israel's foreign policy is constructed around the framework of its strong relationship with the USA. But recent events where the USA has vetoed Israeli arms exports prompt me to consider that perhaps Israel would be better off in the EU than allied with the USA.

The United States of America supplies Israel with $2 billion of aid every year. This is a significant sum of money, but it's less than 2% of Israel's GDP so it isn't essential to Israel. Far more important, however, is the military and diplomatic assistance the USA provides Israel. The USA provides Israel with the latest weapons, does its best to make sure that states that might be opposed to Israel don't get good weapons, gives Israel a free pass over its nuclear arsenal, makes sure there are no UN sanctions of Israel over its occupation of Palestine, and generally provides Israel with a guarantee that if ever there is a serious threat to Israel's security, the USA will do whatever is in its power to stop that threat becoming reality.

In short, the USA does far more for Israel than would be in the USA's strict interests from a Realpolitik point of view.

So, you might think that Israel gets a good deal from this. However, like everything in life, you don't get owt for nowt. Because the USA is Israel's only ally, and is pretty much the only country that Israel can rely on to be on its side, Israel is obliged not do do anything the USA seriously dislikes.

For example, in October 2005 Israel had an agreement to sell Venezuela $100 million worth of equipment for Venezuela's F-16 fighter aircraft, but the USA objected to the deal and Israel was forced to cancel it:

US blocks Israeli arms sale to Venezuela

JERUSALEM, Oct 20 (Reuters) - The United States has blocked a planned sale by Israel of technology to Venezuela to upgrade its fighter planes, Israeli television said on Thursday, marking the latest in several similar bans by Israel's biggest ally.

There was no immediate comment from the Israeli Defence Ministry.

The aviation equipment was to be installed in several U.S.-made F-16 planes used by Venezuela, whose President Hugo Chavez is an ally of Cuba's communist leader Fidel Castro and a vocal critic of the United States, Israel's Channel 1 said. [...]

Israel and Washington, which provides the Jewish state with $2 billion in annual defence aid, had made a deal in August to end a long-running dispute over Israeli exports of attack drones to China. No details of their agreement had been published.

The United States torpedoed a multi-million dollar Israeli sale of airborne radar systems to China in 2000, saying it could upset the regional balance of power.

Or in 2000, Israel had a lucrative contract to sell China $1 billion of Phalcon AEW aircraft, but the USA wouldn't permit the contract – which damaged Israel's commercial relations with China (Israel had to pay China $350 million for failing to complete the contract). From Defense Industry Daily:

DID has covered the recent back and forth between the USA and Israel over defense-related exports, which came to a head over China's purchase of Israel's indigenously-developed Harpy anti-radar UAV and subsequent request for maintenance. By suspending Israel's participation in the F-35 Joint Strike Fighter (JSF) program, Washington was recently able to pressure Israel into essentially granting the USA veto rights on all Israeli defense exports. [...]

The need to avoid stepping on American toes has cost Israel's arms industry heavily in the past (vid. its cancelled $1 billion Phalcon AWACS sale to China, which entailed a $350 million penalty on top of lost revenues), and will likely cost Israel again in future. By reducing the potential scope for Israeli weapons exports, the USA also has the effect of restricting the growth and viability of Israel's native defense industry, making Israel more dependent on US technology and equipment over the long run.

As long as Israel considers its alliance with the USA to be an anchor of its foreign policy, however, it will simply have to accept this. At best, Defense Minister Mofaz will be able to negotiate clearer boundaries with Washington, so Israeli defense companies do not gain a reputation for unreliability.

It's likely that the amount of direct subsidy that the USA gives Israel is probably less than Israel could earn by arms sales worldwide, if it wasn't for American objections. And money that a country gets from its own efforts is worth more to that country in the long term than money it gets handed on a plate. Consider countries with large amounts of oil wealth; over long periods of time these countries tend to have lower growth rates than countries that are not so well endowed with minerals. Japan, for example, has very few raw materials, but is nevertheless one of the richest countries in the world, because of the skills of its people. If a country doesn't have oil or mineral wealth, it is forced, if it wants to become rich, to develop the structures necessary for wealth creation – an educated workforce, a market economy, low levels of corruption, etc. And once a country has developed those structures, it can typically make itself a lot richer than it could through oil wealth. The subsidies that Israel gets from the USA are like oil wealth in that they are unearned income, and don't force the country to become rich through the hard work of generating the right social structures (which in Israel's case might involve further developing its defence industry).

So, if the direct subsidies America gives Israel aren't that important to it, would it make sense for Israel to ditch its close relationship with the USA? No, because as I've pointed out above, the direct subsidies the USA gives Israel are one of the lesser ways it helps it; far more important are American arms supplies and security guarantees.

But what if Israel joined the European Union? By the timescale we're considering, the EU will probably include a mutual defence guarantee; meaning that any attack on one member such as Israel would be considered an attack on the whole Union.

Furthermore, there a structural reasons why the EU could give Israel a better security guarantee than the USA could. This is because the EU is neither an international organisation, nor a country: it's something between the two. This means that any relationship between Israel and the EU would have the potential to be a lot closer than the relationship between Israel and the USA: Israel and the USA are clearly two separate countries, formally independent of each other. But if Israel was in the EU, it would mean that Israel and the other EU member states were formally interdependent, for example they would have shared governmental institutions such as the European Parliament and Commission. Thus although the USA could walk away from Israel at any time, it's unlikely that EU states would abandon a member that was attacked, both for the practical reason that it would make the EU look impotent, destroying its credibility, and the political reason that public sentiment in all EU countries would be in favour of supporting the member which was attacked.

There are two reasons why this might not happen. The first one is the obvious one: Israel's continuing occupation of the Palestinian territories. (Indeed this is a major point of friction in the relationship between Israel and the EU). It would be necessary for Israel to achieve peace with the Palestinians before it could join the EU.

The other reason is more subtle: is Israel a European country? It isn't geographically, but then nor is most of Turkey or part of France. What about culturally? Israel is part of Eurovision and plays football in UEFA. And many Israelis either come from Europe or are descended from people who did. A “typical” Western state has several characteristics, some of which are: it is rich, democratic, it speaks an Indo-European language (typically a Germanic or Romance one), it uses the Roman alphabet, and the main religion is Christianity. Rich and democratic are requirements for EU membership, but Israel has them already. There are EU states that don't speak Indo-European languages (Malta, Finland and Hungary), and ones that don't use the Roman alphabet (Greece). Nor is Christianity a necessary requirement for EU membership: even if Muslim Turkey doesn't join, it's inconceivable that Bosnia, Kosova or Albania will all not join. So the main reason why one might not regard Israel as “European” is if Israelis don't consider themselves Europeans. If Israeli membership of the EU was under consideration, that's exactly what they would have to decide; and if they did decide they were European, it's likely that the European Union would agree with them.

If Israel did seek to align itself with the EU instead of the USA, it would find that there were much less restrictions on its arms exports, and furthermore any restrictions that did apply would be decided collectively by the EU (so Israel would have a voice in what was decided) and would apply equally to all EU states (so there would be no possibility of restrictions caused by a desire to restrict competition). And because the EU is seeking to liberalise its internal arms market, it's likely that Israel would be able to export more arms to European states than it currently does.

It may well be that in the long term, Israel would gain more by being part of the EU than it does from its present arrangements with the USA.

[This article is also published in The Sharpener]

Categories: Israel, Europe, USA, Middle East, warfare

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