Background
The Association Agreement between Israel and the European Union was signed
in the presence of the Foreign Minister of Israel and the Foreign Ministers
of the EU on November 20, 1995.
The preamble to the Agreement includes a declaration that the European
Union, the member states and Israel are interested in promoting the
integration of Israel's economy into the European economy. The Agreement
underwent a ratification process between 1996-2000, and entered into force
on June 1, 2000.
The political section of the Agreement institutionalizes the existing
political dialogue and extends it to other areas of dialogue. To date,
political dialogue at ministerial level was usually conducted several
times a year, often within the framework of forums of foreign
ministers. These contacts took place on an ad hoc basis, and were not
anchored in a formal agreement. The Association Agreement determines that
regular meetings will take place once a year at several working levels,
from the most senior ministerial level to that of officials.
The commercial section of the Agreement regulates the flow of trade in
manufactured and agricultural products (in 1999, the mutual volume of
trade totaled $22 billion). The Agreement maintains the free trade area
established in 1975, and improves the terms of trade in manufactured and
agricultural products. This section deals also with an easing of the terms
of trade with regard to procedures and tariffs.
A new element in the Agreement is the section dealing with liberalization
of the services and capital market and the right of establishment of
firms. This section anticipates the future formulation of bilateral trade
rules, based upon international developments within the WTO framework.
The section on cooperation deals with a wide range of fields, including law,
internal security, environment, education and infrastructure. Most
of the areas of cooperation are new and reflect the mutual aspiration to
expand the application of the primarily trade-related agreement of 1975 to
economic and other areas as well.
The Agreement created formal structures such as the Association Council,
headed on the Israeli side by the Foreign Minister, which is to meet
once a year. Also set up was the Association Committee, headed by the
Director General of the Ministry of Foreign Affairs. In addition,
sub-committees at expert level have been set up for the discussion of professional
matters, such as the opening of negotiations on economic issues (mutual
recognition and accumulation). The Association Agreement also
establishes mechanisms for its effective and ongoing implementation,
including mechanisms for the prevention of disagreements.
The Convening of the Association Council
On June 13, 2000 the Association Council between the European Union and
Israel held its first meeting in Luxembourg, headed by Foreign Minister
Levy and the Foreign Ministers of the EU, marking the entry into force of
the Association Agreement between Israel and the EU. Foreign Minister Levy
addressed the Association Council, and referred in his speech to Israel's
wish to enhance its ties with Europe in all spheres.
The Advantages of the Association Agreement for the State of Israel
The Association Agreement provides Israel with many advantages in its
relations with the EU, both in the political sphere (establishment of an
institutionalized political dialogue at the most senior levels) and in the
economic sphere, as a result of the liberalization of the possibilities of
trade, and particularly Israeli exports to Europe. Within the framework of
the Agreement, Israel will be able to continue improving its economic
status in relation to Europe, particularly in the field of new
technologies in which it specializes.
Political Contacts during the Association Council Meeting
In the course of the meeting of the Association Council, Foreign Minister
Levy held political meetings with the following leaders: the President-in-
Office of the EU Council, Portuguese Foreign Minister Jaime Gama; EU High
Representative for Common Foreign and Security Policy, Javier Solana; the
EU Commissioner for External Policy, Chris Patten; and the President of
Malta, Prof. Guido de Marco. Regional
and bilateral issues were discussed in the meetings. The Foreign Minister also held a press
conference together with Foreign Minister Gama and EU Commissioner Patten.
Signing of the Framework Agreement with the European Investment Bank
The European Investment Bank - Background
The European Investment Bank, one of the European Union institutions, was founded in 1958, and is located in Luxembourg. It provides credits and guarantees for the funding of up to fifty percent of
investment in projects which the EU seeks to promote in domains such as
infrastructures, energy, industry, services and agriculture.
The EIB was established for non-profit purposes, and its budgetary
resources are derived from the funds of EU member states, on the basis of
each state's GNP. In 1999, the funds at the disposal of the Bank
totaled EUR 100 billion. Overall, the loans and guarantees granted by
the EIB do not exceed 250 percent of its equity.
The EIB - General Activity
Most of the activity of the European Investment Bank is within the EU,
although it also contributes to EU development policy. Thus, in the early
1990's, the Bank began to grant loans and credit to the countries of
Central and Eastern Europe. In addition, within the context of the
Mediterranean policy of the EU, the Bank reached financial framework
agreements to provide credit to twelve of the Mediterranean countries
participating in the Barcelona Process.
Bank Activity in the Mediterranean Context
The Barcelona Process does not have direct budgets for projects in the
domain of infrastructures, and the EIB therefore acts as a European "tool"
in this sphere. In the last five years, the Bank has channeled more than
EUR 3.3 billion to the Mediterranean countries. In 1999 alone, the EIB
signed agreements for a total sum of EUR 802 million with the
Mediterranean states.
The European Investment Bank began its activity in the Mediterranean
region in the mid 1970's. Israel and the EIB signed the initial financial
protocols at that time, and the Framework Agreement just signed
constitutes a continuation of these protocols.
The Agreement - The Israeli Context
On June 13, Foreign Minister Levy and the President of the EIB, Philippe
Maystadt, signed a Framework Agreement, enabling the European Investment
Bank to grant loans for Israeli projects related to the Barcelona Process,
including infrastructure and environmental projects. The Agreement thus
institutionalized the ties between Israel and the Bank.
Recently, the Israel Electric Company expressed interest in receiving
loans from the EIB for a project involving the conversion of utilities to
gas. A loan totaling EUR 22 million for the Israel Airport Authority is
also in the pipeline (from funds that were allocated but not utilized, in
an earlier financial protocol). In the past, the Bank has provided
assistance in the financing of a drainage project in Nahal Soreq.
Israel FM Levy and EIB President Philippe
Maystadt sign agreement
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Israel FM Levy,
EU President-in-Office/ Portuguese FM Gama, EU Commissioner
for External Relations Patten
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