Israel’s economic relations with Europe are on a path of progress which cannot be mistaken.

 

[Translated from Hebrew]
 
It is my pleasure to be the guest of Go-4-Europe, at your 6th Conference. I am especially pleased since over the last few years we made a tremendous effort to create a new basis for political and economic cooperation with European countries. For many years, Israel’s relations with Europe were greatly influenced by European stances, which frequently caused feelings of distress or discomfort among not only Israeli policy-makers, but also among broad sectors of Israeli society. These were relations influenced largely by stances which were impatient, unobjective and lacking understanding of a significant portion of the fundamental problems the State of Israel faced over the years. However, in recent years we feel a change, which also influenced the tone of political relations and the openness for economic cooperation between Israel and Europe.

Europe is Israel’s most important trade partner. The scope of mutual trade between Israel and Europe approaches $30 billion per annum. This is an immense scope. The State of Israel purchases more from European countries than any other country in the Middle East. Of course, these relations are built, first and foremost, on the Association Agreement, which connects Israel with the European Union, and allows it, in a framework of mutual trade, to enjoy the benefits the European Union grants to members of this agreement, which came into effect on a practical level in 1996. Over the last two years, we made a significant breakthrough, due to the fact that we succeeded in regulating and removing the cloud which hung over a large section of these relations with regard to Israeli export to Europe, primarily export from areas which, unfortunately, Europe does not recognize as part of the State of Israel.

The resolution of this problem opened the final blocks which clouded our economic relations with Europe. The State of Israel is a partner to the sixth European protocol for scientific development. Over the next four years, we will invest over 190 million Euro as part of our participation in the sixth protocol of the European Union for scientific research and development, and will benefit – as we already do – from full partnership in all the large projects of scientific development, to which Israel has a great deal to contribute. Europe has great interest in them, and the State of Israel, of course, can benefit from the strengthening and development of its economic and scientific infrastructure as part of these agreements.

The State of Israel is the only non-European country, other than China, which is a partner in the European Union’s Galileo Project, which is another project in which we are investing tens of millions of Euro, but we are exposed to the most important development plans in the telecommunications field of the European Union, and Israeli companies will become an integral part of large contracts and large-scale development plans which will allow the Israeli economy to benefit from advantages it did not have in the past.

Israel’s economic relations with Europe are on a path of progress which cannot be mistaken. This path also finds expression in mutual research and development agreements, in establishing national funds with many European countries, and in agreements between the State of Israel and European companies which lead in fields where there is a relative advantage for the Israeli economy and where there is a European interest in innovation and the advanced technological developments in which Israel excels. Thus, over a year ago, we signed an agreement to establish a joint fund with one of the most important companies in the world in the field of telecommunications, the French company Alcatel. We are also today cooperating with Siemens. In the next few months, Siemens will hold a two-day symposium in Germany, during which a large number of excellent Israeli hi-tech companies will be given the opportunity to meet with leading companies in Europe, in order to try, through this process, to strengthen the possibility of selling advanced Israeli products in Europe. I hope we will reach a similar understanding with the Deutsche Telekom company, whose senior executives visited with me yesterday, as part of this effort to expand cooperation with European companies.

Over the past few years, more and more European countries are expressing interest in investing in Israel and participating in central infrastructure projects. Thus, for example, the French company Alstom, the leading foreign company in the Jerusalem light-rail project – one of the most important infrastructure projects being carried out in Israel over the last few years – won the public tender over other European companies, and also over companies from other regions in the world. I frequently hear disappointment in the things our good friends from the United States tell me, due to the fact that there is an ongoing penetration of European companies in the Israeli economy, despite the fact that the tradition of mutual relations between ourselves and the United States is a tradition of excellent, beneficial and fruitful relations for Israeli society. However, the Israeli economy is an open one.  One which is growing.  It is an economy exposed to potential investors from every part of the world, and we are open to European investment.

Last year, we reached an unprecedented record of over $6.25 billion in real investment in Israeli industry and the economy all around the world. A significant portion was from Europe. The sum total of investment, including financial investment in the Israeli economy over the past year, is over $12.5 billion. Again, a significant portion of these investments was from Europe. It would have been impossible to conceive of this process. It would have been impossible to conceive of a growth of the Israeli economy of over 5.2% last year, with a forecast for growth of 4.5% in the coming year. It would have been impossible to conceive of all these investments.  It would have been impossible to conceive of all this cooperation, all these agreements, the expanding network of bilateral agreements and framework agreements with various European countries and with the European Union.

It would have been impossible to conceive of the new agreement, which allows us to join other Middle Eastern countries, such as Jordan and Egypt, and become part of the pan-European accumulation agreements, were it not for the political step we took, which created a new atmosphere and new openness, as well as new opportunities for the Israeli economy. This bold, far-sighted policy of Prime Minister Ariel Sharon benefits Israeli society, not only in the field of political cooperation, but also in creating economic opportunities, new openness, in the readiness of foreign investors to take a gamble on the stability, continuity and strength of the Israeli economy. As a result of this, processes which were extremely slow in earlier years have taken on tremendous momentum over the last two years, and for coming years. I am certain that these processes will strengthen and continue, first and foremost, if we can preserve the political momentum, and continue the opening of opportunities for changing the atmosphere in the Middle East. 

I know that the reality which we face is a complex and complicated one. The easiest thing to do in such a reality is to lose our senses, panic, spread slogans, scare ourselves, and lose our basis of good will and international support and understanding which the wise, young and determined Israeli policy created for the State of Israel over the last few years. We will act differently. We will act with discretion, responsibility, calmness and caution.

As a result of the changes which are taking place in the Palestinian Authority – albeit unwanted changes – we succeeded in crystallizing broad international agreement, led by the United States, the Quartet and European countries – in the east and in the west – in which everyone supports the three principles defined by the State of Israel following the elections in the Palestinian Authority and the Hamas victory:

There will be no recognition of a Palestinian government with the participation of or under the control of Hamas, unless three conditions are met: the Hamas Charter is changed to recognize the State of Israel’s right to exist as a Jewish state; total dismantling of weapons and total cessation of terrorist activity; and acceptance of all agreements signed between the Palestinian Authority and the State of Israel.

These three principles were defined by us, composed by us and – as a result of the good, fruitful and responsible relationship which we developed with the international community – they have now become the basis which unites the entire international community, the United States, the European countries, the State of Israel and other countries.

Our position is the accepted one. We will act accordingly, as will other countries. And with this reality, on the basis of these principles, I am certain we can continue leading the relationship of the State of Israel with the international community, and of course with the Palestinian Authority in a responsible and correct manner.

We have no intention of harming the head of the Palestinian Authority, Abu Mazen. He is the elected leader of the Palestinian Authority. He was elected in direct election by a majority of the Palestinian public, and as long as he does not cooperate with Hamas, and as long as the Palestinian government is not a Hamas government, we will cooperate with the Palestinian Authority cautiously, responsibly, and with the intention of strengthening those elements which recognize the State of Israel’s right to live without terror, in safe borders and we will not play into the hands of the extremists who seek to create an endless war here, endless terror, and to undermine any chance which may exist to create new hope both for the Palestinians and for the citizens of the State of Israel.

It is for this reason that we decided to transfer the funds which we collect for the Palestinian population, for the Palestinian Authority. These funds belong to them as long as the Palestinian Authority does not cooperate with Hamas, and as long as the Palestinian government is not a Hamas government. We will no longer transfer the funds automatically. We will examine the situation carefully at all times, but we will do so out of the desire to ensure that it will be possible to maintain stability, and we will not be tempted to play into the hands of those who wish to create an atmosphere of havoc.

We will continue to fight terror. We do so every day. We will not relax and we will not stop in the north, the center of the country, or the south. We will stop anyone who tries to carry out an act of terror, fire Qassam rockets or send suicide bombers. We will find them where ever they are, and we will stop them.  Under no circumstance and in no situation will we expose the citizens of the State of Israel to the danger of terrorist activity, which some of the Palestinian organizations are unwilling to stop. However, as long as the Palestinian government is not a Hamas government, we will maintain the connection obligated by our commitment to do everything to preserve the chances for peace and for a better reality in the near future.

Finally, I wish to say something about the internal atmosphere here. We are in the midst of a difficult disagreement. It did not begin today. It has continued for quite some time. It is difficult and painful, and I feel this disagreement cannot be obfuscated only by spouting slogans. However, we can speak honestly, with complete openness and seriously, with a feeling of responsibility for all sectors of the public about this disagreement, and about the measures we adopt in order to be able to live with it.

I intend to speak with everyone. I am not afraid to talk to those who fight us.  And of course I will speak to those who are an inseparable part of Israeli society. They are a loved part, they are a part which made a great contribution, even if sometimes I disagree with them, even if I am of the opinion that they are mistaken, and I am concerned that they are misleading, and I am convinced that they may, heaven forbid, lead us to a path which has no exit. I will speak with everyone. I will conduct a dialogue with everyone. I will sit with everyone and try to find a way to solve our internal problems, not out of hate, not out of annoyance, not out of a desire to hurt, but out of patience – endless patience – because we have no other way.

If there is something I have learned from our collective experience over many years, it is that, despite our differences, if we can eventually preserve the basis which unites us all, there is no limit to our power, there is no limit to our possibilities, there is no limit to our chances. And I will never waive our duty to maintain the law, carry out the decisions of the courts and protect Israeli democracy at any cost, and also the need to embrace all sectors of Israeli society, and speak with them in order that we may all march forward.