On July 23, ABC Newsradio host Tracy Holmes interviewed Hugh Lovatt, the co-author of a report by the European “think tank”/NGO, the European Council on Foreign Relations, calling on Europe to impose sanctions on all Israeli banks, because they do business in the West Bank.
The interview was posted on ABC’s website under the wordy headline: “Tel Aviv’s bank index took a dive yesterday when the European Council on Foreign Relations issued a report on Israel’s settlements in the West Bank”.
That, however, is only a half-truth. While the bank index did register a drop that day, it was, according to reports, a reaction to a story by Reuters‘ Israel correspondent Luke Baker that had exaggerated the potential impact of the ECFR report – and not so much a reaction to the ECFR report itself. This is an important distinction.
As Israeli business daily Globes reported: “Reuters: EU mulls sanctions on Israeli banks”.
“Reuters” reports that the European Union is considering sanctions against Israeli banks. Having decided to push ahead with labelling Israeli goods made in settlements in the West Bank, there are proposals to go much further, including targeting Israeli banks, reports “Reuters.”
What the Globes story doesn’t make clear is that the origins of the proposals are in the ECFR report itself – not from the EU. The ECFR report makes “recommendations” to the European Union, and importantly does not reflect current EU thinking but rather what the ECFR would like the EU to think.
An Israeli government source commented on the story for Globes the next day, in a follow-up story that even while correcting the Reuters story, still seemed to overstate the seriousness of the threat, and failed to fully take into account its origin:
“It appears that what are involved are the recommendations of a body providing consultation to the European Union, not a decision by the European Union itself. It is worthwhile waiting for the decisions themselves and considering their significance, instead of going into a panic at every report by Reuters,” a government source said. [Emphasis added]
Foreign Ministry spokesman Alov Lavi also downplayed the significance of the report, in a story published in the Jerusalem Post.
Meanwhile, Ynet reported that an EU diplomat categorically denied the EU was considering placing sanctions on Israeli banks.
“We have no intention of imposing restrictions on Israeli banks that do business in the settlements. This entire issue is complete nonsense. This issue has never been considered,” the diplomat said.
The European diplomatic source added later in the story:
“This [the ECFR] is an independent research institute that has no connections to the European Union and has no more influence than any other research institute,” the European diplomat said. “Anyone can publish reports. It has no basis in reality. There are no plans for further legislation on this issue except for the plans to label settlement products which are moving forward, but have yet to be finalized.”
This begs the question: What is the ECFR and who do they represent? And how about the authors of the ECFR report – what is their history on the subject of the Israeli-Palestinian conflict?
The ECFR – a lobby group masquerading as a think tank
According to Reuters‘ Baker, the ECFR’s “proposals frequently inform EU policy-making”. It’s a claim that the ECFR would certainly like the world to believe, but the level of influence of this organisation on EU policies is open to interpretation. One thing is clear – it hasn’t been on the scene long. The organisation dates back only to 2007, and is the brainchild of US billionaire and major political investor George Soros.
The organisation uses flowery language on its website to justify and glorify its existence, but the bottom line is that it is backed by private money and is a politically motivated organisation that answers only to its donors. It calls itself a “think tank” but could equally be described as lobbying group.
Unlike other traditional lobbying groups, however, there are no identifying features about the organisation to inform outsiders about what their agenda is.
The Israeli watchdog group NGO Monitor’s fact sheet on ECFR concludes that the “highly subjective and propagandist statements [by ECFR researchers] are inconsistent with the mandate of a credible research organization.”
By necessity, this blog must limit its scope to the ECFR’s stance on the Israeli-Palestinian conflict, and here the evidence makes it very obvious that its reports and the views of the staff it has working on this issue have been extremely antagonistic towards political Zionism, while tilting heavily towards Palestinian positions – even extreme ones.
In 2013, Lovatt essentially kneecapped Palestinian moderates by calling for European engagement with Hamas.
In May 2015, Lovatt accused the Israeli Prime Minister of lying about supporting a two-state solution.
“The big danger is that we have this fiction that Netanyahu truly supports the establishment of a Palestinian state.”
Most revealingly, however, in October 2014, Lovatt and Mattia Toaldo, – the pair responsible for the current report – published a paper “What Palestinians can expect from Europe”.
Instead of looking at the conflict in a balanced or even nuanced way, the paper advised only Palestinians, offering advice on how the Palestinians can exploit Europe to their own political advantage. Moreover, this was not for a goal of a negotiated solution for peace. This idea was not even given lip-service or mentioned even once.
Rather, their advice was aimed at helping Palestinians achieve some nationalistic goals through internationalising the conflict and without having to compromise their existential opposition to the existence of Israel as a Jewish state.
The authors even admonished the Palestinian leadership for not working hard enough for unilateral statehood. “Do not expect Europeans to be more pro-Palestinian than the Palestinian leadership,” Lovatt and Toaldo wrote, adding later in the essay:
…if properly put under pressure, Europe can alter the cost/benefit calculation of the Israeli occupation. To do this, harsh rhetoric such as that employed by Mahmoud Abbas at the UN will be counterproductive, especially when associated with PLO policies that do little to alter the status quo. Europe is an international law-based community and the Palestinian leadership should use that to its advantage.
It’s a document of remarkable hubris, which in effect called upon Palestinians to ignore the policies of their own leaders and simply let Lovatt and Toaldo lead them like the pied piper towards a European-imposed withdrawal of the IDF from the West Bank, without peace or even negotiation.
If the October 2014 essay by Lovatt and Toaldo was the “blueprint” for this advice, last Wednesday’s report was the finished product, a report aimed at pressuring the EU into following the directives, “proposals” and “recommendations” of an organisation that has the audacity to claim to aim to serve the interests of Europe while representing no one but its donors, including non-Europeans.
The views of Lovatt and Toaldo, it should be added, are entirely in sync with the rest of the ECFR’s Middle East and Africa department. The department head, far-left former Israeli official Daniel Levy, told then-ABC Triple J Hack host Sophie McNeill in November 2012 that Israel “hadn’t tried” making peace with the Palestinians.
In a panel discussion two years earlier, Levy described the creation of Israel in 1948 as “an act that was wrong”.
In perhaps a revealing aside, in 2003 Mark Leonard – then director of The Foreign Policy Centre (UK) and today the director of the ECFR – wrote in the Guardian about his own estranged secular Jewish relationship with Israel led by then-Prime Minister Ariel Sharon:
“The sense that we will be implicated in the actions of a right-wing government that we can’t vote for and do not support is deeply uncomfortable.”
As Lovatt and Toaldo’s October 2014 essay made clear, the ECFR believes that the EU is too pro-Israel and isn’t doing enough for the Palestinians. What isn’t clear is why this think tank believes unilateral Palestinian statehood and pressure for an imposed Israeli withdrawal from the West Bank in the absence of peace would improve the lives of Palestinians or be in the interests of Europe.
Separating fact from fiction about Israeli bank stability
ABC parroted the ECFR’s claims that its report directly impacted Israeli bank stocks, but it’s worthwhile to take note of exactly how much impact it really had.
The drop came after a period of eight straight gains for the Tel Aviv Stock Exchange and on a day when global markets in the US, Europe and Asia moved broadly lower.
Moreover, Australian bank stocks had also dropped broadly on the same day Israeli stocks dropped.
Was part of the Israeli drop on July 22 possibly attributable to the trend in global markets that day? It’s very likely, though the question was not asked.
Why bother making this point at all, you ask?
Holmes used the segment to promote the views of ECFR. ECFR has made its position clear – it is seeking more European economic pressure on Israel to end its presence on the West Bank unconditionally.
Stories such as this one about boycott and sanction efforts against Israel that regularly air on ABC might give listeners the impression that the Israeli economy is suffering or teetering on the brink from such campaigns.
Such a narrative creates a false “momentum” that BDS activists are counting on to further their aims.
Yet, while BDS is aimed at harming the Israeli economy and must be condemned at every opportunity, the encouraging reality is that its actual impact has been quite limited.
(It’s notable that no Israeli fund manager reached for media comment advised people to sell their bank stocks – this list including Erez Zadok of the Aviv Hedge Fund and
Alon Glazer, deputy CEO of Leader Capital Markets, both quoted in the left-leaning Ha’aretz daily.)
In fact, had Holmes bothered to do a little background research, she would have learned something surprising about the Israeli banking sector of interest to her Australian audience.
That is – even after taking into account the drop on July 22 – over the past year Israeli banks have generally been outperforming Australian banks. In some cases, they have been outperforming them by a huge margin.
I’ve compiled that remarkable data into a separate web page here.
Why are Australian banks underperforming compared to Israeli banks? It’s a question, one would think, of genuine value to ABC’s listeners. However, for ABC – which rarely airs reports about Israel without a connection to the Israeli-Palestinian conflict – it’s a question that will remain unanswered.
Moreover, for Holmes in particular, this is again an example where she has allowed her program to be used as a platform by activists for the Palestinian cause. In June 2014, I blogged about her bizarre interview with an official from the left-wing NGO Breaking the Silence when the issue of east Jerusalem had surfaced in the Australian parliament (bizarre since east Jerusalem is an area outside of BTS’ West Bank purview, since it is under Israeli sovereignty and not under Israeli military control.)
Holmes’ seeming preference for one-sided NGO commentary on the Israeli-Palestinian conflict brings to mind the observations of former AP journalist Matti Friedman, in a landmark article from last year about the way the conflict is reported in the media.
Many foreign journalists have come to see themselves as part of this world of international organizations, and specifically as the media arm of this world. They have decided not just to describe and explain, which is hard enough, and important enough, but to “help.”
A final point to mention: Financial markets are places where fortunes are lost and made over impulsive, “panic” sells. If someone were to know in advance that a report that could negatively impact Israeli bank stocks was about to be released and publicised, such information could be used for financial advantage.
While I know of no evidence such exploitation took place here, such a scenario cannot be dismissed out of hand.