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. Last Updated: 07/27/2016

ATLANTIC RIM: EU Demands Political Voice In Middle East

Call it the euro effect. Preening itself at having been spared any domino effect from the Asian financial crisis, and confident that its new single currency will be launched successfully and on time, the European Union is staring to flex its other muscles. For the first time since its disastrous attempt to stop the Bosnian war, the EU is making another foray into international diplomacy.

In a formal communiqu? to the European Parliament, the EU's legislature, and the various foreign ministers, the European Commission proposes withholding economic aid unless Israel stops blockading the Palestinian economy. It also demands a full place alongside the United States at the negotiating table.

As the supplier of 54 percent of all aid funds to Palestine since the 1993 Washington donors' conference, the EU's decision to brandish its economic weapon is a challenge to both Israel and to the United States. It is also likely to buttress Israeli claims that the EU is partial to the Arab side.

The EU is demanding a new role as chief of the international economic effort behind the peace process, since it has given $1.5 billion of the $2.8 billion committed so far, compared with $280 million from the United States. "The basic shareholder must be the key coordinator," says the EU.

But relations with Israel and the Middle East are so important to U.S. interests that Brussels' flourish risks trouble with Washington. This puts Britain in an awkward position, as current holder of the EU presidency and as the United States' closest European ally. British Foreign Secretary Robin Cook will have to handle the commission proposal carefully at next week's meeting of EU foreign ministers. Most EU members are likely to back the proposal, and so is the European Parliament.

The plan was launched by EU Commission Vice President Manuel Marin of Spain. Openly impatient at the EU's subordination to the United States in the Middle East peace process, he said the failure of Israeli-Palestinian talks was now "contaminating" the EU's other objectives in the region. Moreover, Marin said EU efforts to develop the Palestinian economy had been so frustrated by the failures to reach a political settlement and by Israeli security measures that "all Palestinian economic indicators point to a clear deterioration of living standards, with per capita gross domestic product down by over one third."

The result was "widespread international donor fatigue," and as by far the biggest aid donor, the commission set new conditions on any extension of its aid program, which runs out later this year. The most controversial condition is for an end to Israel's security blockades of Palestinian territories, with a demand that "the Palestinians must have open trade access to the outside world including Israel."

Although the EU says it accepts a "complementary role alongside the leading role of the U.S.," the new proposal represents a challenge to Washington. It asserts that the current U.S. effort "is in a state of persistent deadlock" and that because Europe pays the piper, the EU now wants to call the tune.

Timed for the week when both Israeli Prime Minister Benjamin Netanyahu and Palestinian President Yasser Arafat visit the White House, Europe's initiative would risk a sharp rebuff. In the Middle East and the Balkans, in Eastern Europe and in Russia, Europeans say U.S. foreign policy depends on their cash.