JOINT STAFF WORKING PAPER Implementation of the European Neighbourhood Policy in 2010Country Report: Israel  JOINT STAFF WORKING PAPER Implementation of the European Neighbourhood Policy in 2010Country Report: Israel
Date: 2011-05-25
Institutions: European Commission, High Representative of the Union
Subjects: European neighbourhood policy, Israel, State aid, association agreement, bilateral agreement, democracy, economic reform, human rights, political cooperation, political reform

EUROPEAN COMMISSION 

HIGH REPRESENTATIVE OF THE
EUROPEAN UNION FOR 
FOREIGN AFFAIRS AND 
SECURITY POLICY

Brussels, 25.5.2011 
SEC(2011) 642 final 

JOINT STAFF WORKING PAPER 

Implementation of the European Neighbourhood Policy in 2010 
Country Report: Israel 

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JOINT STAFF WORKING PAPER 

Implementation of the European Neighbourhood Policy in 2010 
Country Report: Israel 

1. 

OVERALL ASSESSMENT  

Israel  and  the  European  Community  first  established  contractual  relations  in  1975  with  the 
signing  of  a  Cooperation  Agreement.  An  EU-Israel  Association  Agreement  was  signed  in 
1995  and  entered  into  force  in  2000.  It  sets  out  in  more  detail  the  specific  areas  in  which 
relations can be developed bilaterally. On this basis the EU-Israel European Neighbourhood 
Policy (ENP) Action Plan was adopted in April 2005, initially for a period of three years. EU–
Israel meetings take place at the level of the Association Council, the Association Committee 
and  subcommittees,  nine  of  which  are  activated.  In  addition,  a  wide  range  of  contacts  are 
maintained at all levels.  

This document reports on the overall progress made on the implementation of the EU-Israel 
ENP Action Plan between 1 January and 31 December 2010, although developments outside 
this period are also considered where relevant. It is not a general review of the political and 
economic  situation  in  Israel.  The  sectoral  report  contains  information  on  regional  and 
multilateral sector processes. 

In 2010 the EU and Israel maintained strong bilateral relations and an open political dialogue. 
The Association Council, originally scheduled for March 2010, took place in February 2011, 
while  the  EU-Israel  Informal  Working  Groups  on  Human  Rights  and  International 
Organisations  and  the  sub-committee  on  Political  Dialogue  and  Cooperation  were  held  in 
September  and  December  2010  respectively.  Bilateral  dialogue  on  sector-specific  and 
technical  matters  slowed  down  in  2010.  Only  one  subcommittee  was  held,  in  March.  One 
important achievement in bilateral relations was the signing of the Agreement on Conformity 
Assessment and Acceptance of industrial products (ACAA), which is, however, still subject to 
the European Parliament’s consent. The EU also acknowledged that the level of personal data 
protection in Israel was adequate. Negotiations between Israel and Europol on an operational 
cooperation agreement moved forward.  

The  Israeli  economy  showed  considerable  resilience  to  the  global  economic  crisis.  The 
economy  resumed  strong  growth  in  2010.  This  was  the  result  of  effective  policy  measures 
during  the  crisis,  but  also  of  prudent  macro-financial  policy  frameworks  established 
beforehand.  

There  was  no  significant  progress  towards  a  comprehensive  settlement  of  the  Israeli-
Palestinian  conflict.    Following  the  Israeli  government’s  decision  to  allow  the  ten-month 
moratorium  on  settlement  construction  in  the  West  Bank  to  expire  in  September,  direct 
negotiations between the two sides came to a halt.  On expiry of the moratorium, settlement 
activity resumed.  The demolition of houses in the West Bank, particularly in East Jerusalem, 
continued  during  the  reporting  period.    Although  Israel  did  take  steps  to  ease  restriction  on 
movement  in  the  West  Bank,  further  efforts  are  needed.    The  Israeli  government’s  June 
decision to ease the blockade on the Gaza Strip brought about some improvements as regards 
imports  of  goods.    However,  the  government’s  decision  in  December  2010  to  allow  some 

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additional exports in the future has not yet been enforced.  The overall social and economic 
situation  in  the  Gaza  Strip  has  not  substantially  improved.  Rockets  and  mortar  shells 
continued  to  be  fired  from  Gaza,  and  arms  smuggling  persisted;  Gilad  Shalit,  the  Israeli 
soldier abducted by Hamas, remained in captivity. 

Against this background and in line with its decision of June 20091, the EU did not resume the 
process of upgrading relations in 2010. At the Association Council the EU agreed to explore 
further  with  Israel  any  opportunities  still  offered  by  the  2005  ENP  Action  Plan  -  which 
remains the reference document of EU-Israel bilateral relations - and pursue technical talks to 
identify areas for potential cooperation in the future. The validity of the Action Plan has been 
extended by mutual consent until June 2011.  

As  regards  the  domestic  situation  with  regard  to  human  rights,  pressure  on  civil  society 
organisations, including from government members, has increased, leading to a deterioration 
in  their  working  environment.  Furthermore,  the  economic  and  social  situation  of  the  Arab 
minority, including the Bedouin community, and its full integration into Israeli’s society and 
protection of its rights, need to be addressed more effectively. Israel’s occupation of the West 
Bank  and  its  policies  vis-à-vis  Gaza  have  continued  to  have  serious  repercussions  on  the 
freedom  and  individual  rights  of  the  Palestinian  population  (for  further  details  see  the 
Progress Report on the Occupied Palestinian Territory). 

2. 

POLITICAL DIALOGUE AND COOPERATION 

Democracy, human rights and fundamental freedoms  

The  promotion  of  democracy,  rule  of  law  and  respect  for  human  rights  and  international 
humanitarian  law  have  been  raised  regularly  with  the  Israeli  authorities  and  were  subject  to 
in-depth  discussions  at  the  meetings  of  the  EU-Israel  informal  Working  Group  on  Human 
Rights  and  on  International  Organisations  and  the  EU-Israel  subcommittee  on  political 
dialogue and cooperation. 

Israel  is  party  to  most  international  human  rights  instruments  but  not  to  their  optional 
protocols. During the reporting period Israel did not cooperate with the special rapporteur on 
the  situation  of  Human  Rights  in  the  Palestinian  territory  occupied  by  Israel,  accusing  the 
rapporteur  of  political  bias  in  favour  of  the  Palestinian  side.  Israel  has  not  responded  to 
requests for a visit by five UN Special Rapporteurs  

As regards minority rights, there was limited progress on the situation of the Arab minority. 
They  were  slightly  better  represented  in  the  civil  service  and  in  government  offices,  but 
remained  well  below  the  target  of  10 %  by  2012  provided  for  in  the  legislation.  Urban 
planning of Arab localities has progressed. A number of bills pending in the Knesset have had 
a strong alienating effect on the Arab-Israeli community, including the proposed amendment 
to the Citizenship Law according to which naturalised citizens would have to swear allegiance 

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[…] That upgrade must be based on the shared values of both parties, and particularly on democracy 
and  respect  for  human  rights,  the  rule  of  law  and  fundamental  freedoms,  good  governance  and 
international  humanitarian  law.  The  upgrade  needs  also  to  be,  and  to  be  seen,  in  the  context  of  the 
broad range of our common interests and objectives. These notably include the resolution of the Israel-
Palestinian  conflict  through  the  implementation  of  the  two-state  solution,  the  promotion  of  peace, 
prosperity and stability in the Middle East and the search for joint answers to challenges which could 
threaten these goals. 

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to  the  State  of  Israel  ‘as  a  Jewish  and  democratic  state’.  In  March  2011,  legislation  (Nakba 
Bill)  was  adopted  that  would  penalise  organisations  receiving  public  funding  that  commit 
offences such as celebrating Israeli Independence Day as a day of mourning or that reject the 
State of Israel as a Jewish and democratic state. Legislation was also adopted allowing small 
communities  in  Galilee  and  Negev  to  disqualify,  on  the  basis  of  certain  criteria,  candidates 
seeking to settle in those communities.  It is feared that this legislation could, inter  alia, be 
used to entrench segregation between Jewish and Arab citizens of Israel.  

Little progress was made towards the broad recognition of Bedouin villages, as recommended 
by the Goldberg Commission in December 2008. The resolution prepared by the government 
to  implement  the  Commission’s  recommendations  has  not  been  adopted  yet.  House 
demolitions in Bedouin communities continued and became increasingly violent,  with some 
demolitions in January and February 2011 leading to fierce clashes in which many villagers, 
including  women  and  children,  were  injured.  The  European  Initiative  for  Democracy  and 
Human Rights continued to support human rights projects in Israel, with an allocation of EUR 
1.3 million in 2010. 

In the area of freedom of expression and association, public criticism of the work of human 
rights  organisations  has  continued,  including  from  leading  government  parties  and 
personalities, and has even increased compared to the previous year. A bill on NGO recipients 
of  financial  support  from  Foreign  Political  Entities  was  adopted  in  February  2011.  The 
provisions which caused the greatest concern have been dropped. However, the law imposes 
additional  and  potentially  excessive  transparency  requirements.  Moreover,  it  applies  only  to 
funds received from foreign public sources and not to private donations. A number of other 
bills  are  pending  in  the  Knesset,  including  one  establishing  a  Parliamentary  enquiry 
committee to investigate the funding of Israeli organisations that allegedly participate in a de-
legitimisation  campaign  against  the  Israeli  State  and  Army,  as  well  as  one  targeting 
individuals  who  initiate  a  boycott  against  the  State  of  Israel  or  encourage  participation  in  a 
boycott.  

Within Israel, the rule of law and independence of the judiciary continued to be applied.  The 
worsening  working  conditions  of  public  prosecutors  led  to  a  strike  in  2010.    The  trial  of 
former  president  Katsav  took  place  in  2010  and  2011,  leading  to  his  conviction  and 
sentencing to seven years’ imprisonment for sexual offences. 

Israel  continues  arresting  and  holding a number of  Palestinians in administrative  detention 
without formal charges. However, the number of administrative detainees decreased, from 278 
in December 2009 to 205 in December 2010. Security suspects in the hands of the Security 
Authorities  can  be  denied  access  to  a  lawyer  for  up  to  21  days.  These  detainees  may  be 
interrogated incommunicado for four days without judicial oversight, and with the exception 
of  one  hearing  before  a  judge,  the  interrogation  may  continue  while  the  detainee  is  held 
incommunicado for three weeks. Palestinians detained in the hands of the security authorities 
in the West Bank may be prevented from meeting a lawyer for up to 90 days. 

As regards torture and ill-treatment, in November 2010 the Government took the decision 
that  the  task  of  investigating  torture  allegations  against  the  General  Security  Service  (GSS) 
should be transferred from the GSS itself to the ministry of justice. This decision has not been 
implemented  yet.  Since  2001,  no  complaints  against  the  GSS  have  led  to  criminal 
investigations.  There  were  a  number  of  reports  by  Israeli  NGOs  on  problematic  detention 
conditions  of  Palestinians,  in  particular  in  one  interrogation  facility  of  the  Israel  Security 
Agency (ISA).  

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According  to  the  2010  World  Economic  Forum  report,  Israel  ranks  the  highest  among 
countries  in  the  Middle  East  and  North  African  region  with  respect  to  gender  equality 
indicators. However, Israel has slipped down seven places compared with the previous year, 
mostly  due  to  a  widening  wage  gap  and  a  smaller  proportion  of  women  in  ministerial  level 
positions. Women still remain underrepresented in national and local government, with Arab 
women even further underrepresented. The Equal Employment Opportunities Commission is 
fully functioning: addressing a number of discriminatory behaviours in the workplace with a 
large proportion of cases dealing with gender discrimination. Israel undertook to improve the 
collection of gender disaggregated data by 2015.  

As  regards children’s  rights,  in  2010  there  was  a  sharp  increase  in  the  number  of  children 
being  arrested  in  the  Occupied  Palestinian  Territory,  and  particularly  in  East  Jerusalem. 
According to Israel Police figures, between November 2009 and October 2010 the Jerusalem 
District opened 1 267 criminal files against Palestinian children living in East Jerusalem who 
were  accused  of  throwing  stones.  Children  are  increasingly  detained  in  child-designated 
prison  sections.  However,  there  have  been  several  cases  of  detained  children  mixing  with 
adults. According to official figures, as of August 2010, 58 % of detained Palestinian children 
were  kept  inside  Israel,  thus  contravening  the  Fourth  Geneva  Convention.2  The  juvenile 
military  court  that  has  been  established  in  the  West  Bank  will  continue  to  operate  in  the 
coming  year.  However,  many  aspects  of  it  are  problematical,  including  the  fact  that  the 
conditions surrounding the children’s arrest, interrogation practices, and detention before the 
trial are not examined by civil authorities. Children often do not have access to their families 
during this process. 

Combating  anti-Semitism  —  Fight  against  racism  and  xenophobia, 
Islamophobia 

including 

The EU and Israel pursued their cooperation in supporting initiatives tackling anti-Semitism, 
racism and xenophobia. As reported last year, the EU’s Fundamental Rights Agency published 
a new report on Anti-Semitism in the EU in April 2010. Also in April 2010 a joint seminar was 
held in Jerusalem. The EU funded a project aiming to create a unified network of Holocaust 
archives,  with  the  participation  of  20  archives  and  research  institutes  from  13  countries  in 
Europe, the United States and Israel, including Jerusalem’s Yad Vashem. 

Cooperation  on  foreign  and  security  policy,  regional  and  international  issues,  conflict 
prevention and crisis management 

Cooperation under CFSP/ESDP, crisis management 

The mandate of the EU Border Assistance Mission in Rafah (EUBAM Rafah) continues until 
31  May  2011,  with  a  further  extension  in  process.  The  mission  maintains  its  operational 
capability  and  remains  ready  to  redeploy  its  personnel  at  the  crossing-point  as  soon  as 
conditions permit.  

Situation in the Middle East 

There was no progress towards a comprehensive settlement of the Middle East Peace Process. 
In  September  2010,  following  a  four-month  period  of  proximity  talks,  the  Israeli  and 
Palestinian  sides  engaged  in  direct  talks,  supported  by  the  US,  the  EU  and  the  Quartet. 

2 

According to the Convention, "protected persons accused of offences shall be detained in the occupied 
country, and if convicted they shall serve their sentence therein’. 

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However,  the  Israeli  government's  subsequent  refusal  to  extend  the  10-month  settlement 
moratorium  on  construction  in  the  West  Bank  after  its  expiry  in  September  2010  led  to  the 
suspension of negotiations. Within the Quartet, the EU supported and encouraged US efforts 
to persuade the parties to resume negotiations.  This was complementary to its own efforts in 
this  regards,  reflected  in  the  conclusions  adopted  by  the  Foreign  Affairs  Council  on  13 
December 

Settlement  activity  in  the  West  Bank,  including  East  Jerusalem,  was  limited  during  the 
moratorium, in particular between March and September 2010. However, in the last months 
of  2010  and  the  beginning  of  2011  substantial  settlement  activities  resumed.  House 
demolitions  and  evictions  of  Palestinians  from  their  homes  continued  in  the  West  Bank, 
particularly in East Jerusalem,  with  a  total  of  431  Palestinian structures demolished in 2010. 
One child was killed and 133 Palestinians were injured in 2010 as a result of attacks by Israeli 
settlers.  In  addition,  over  3 700  olive  trees  were  vandalised  during  the  olive  harvest.  The 
ongoing  impunity  continues  to  favour  settlers.  Four  Israeli  settlers  were  killed  in  an  attack 
claimed  by  Hamas  and  in  March  2011  a  family  of  five  was  murdered  in  the  settlement  of 
Itamar. 

Rockets and mortar shells continued to be fired from Gaza and arms smuggling persisted. The 
firing of rockets from Gaza and retaliatory strikes by the Israeli military escalated in March 
2011.  Hamas  maintained  its  control  over  the  Gaza  Strip.  Gilad  Shalit,  the  Israeli  soldier 
abducted by Hamas, remained in captivity. The EU continued to call for his immediate release 
and for a complete halt to violence. Since the end of Operation Cast Lead in 2009, the Israeli 
Defence  Force  has  investigated  400  complaints  and  questioned  about  600  officers  and 
soldiers.  Out  of  the  400  complaints,  50  evolved  into  criminal  investigations  and  three  into 
indictments. 

On 31 May  2010 a six-ship flotilla carrying humanitarian aid attempted to break the blockade 
that  Israel  had  maintained  over  the  Gaza  Strip  since  Hamas  took  control  in  2007  and  was 
intercepted  by  the  Israeli  Navy.  In  the  ensuing  clashes  between  Israeli  forces  and  activists 
there were nine casualties among the activists and several people on both sides were injured. 
The  EU  publicly  regretted  the  loss  of  life  and  condemned  the  use  of  violence.  In  June  the 
Israeli government established a domestic commission with international observers in charge 
of investigating the events, which published its report in January 20113. In August 2010 Israel 
also agreed to cooperate with a UN investigating panel composed of four members, of whom 
one is from Israel. Israel did not cooperate with the UN Human Rights Council panel which 
investigated the events and published its report in September 2010.  

Following the flotilla raid, the Israeli government partly eased the blockade on the Gaza Strip. 
There was a 62% increase in the number of truckloads allowed in between May and October 
2010.4 However,  imports  are  far  from  pre-2007 levels.  Between June  and October 2010 the 
supply  of  diesel  increased  by  50 %  for  transportation  and  by  125 %  for  power  production. 
Despite  this  progress,  a  fundamental  change  in  policy  is  still  required  to  allow  for  the 
reconstruction and economic  recovery  of the Gaza Strip. With  the  exception of  flowers and 
strawberries,  the  ban  on  exports  remains  in  place.  In  December  the  Israeli  government 

3 Turkey also prepared an investigation report, which came to opposite conclusions on many instances. 
4 

In May 2 650.5 truckloads entered the Gaza Strip, as opposed to 4 305 in October. Before the closure in 
2007 about 10 000 truckloads entered the Gaza Strip per month. 

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announced that some additional exports would be allowed in the future, although this decision 
remains largely to be implemented. 

Israel took further limited steps in 2010 to ease restrictions on movement in the West Bank.  

Non-proliferation  of  weapons  of  mass  destruction  and  their  means  of  delivery,  including 
ballistic missiles  

As  regards  the  EU-Israel  informal  dialogue  on  non-proliferation  of  weapons  of  mass 
destruction, the EU continued its efforts to make progress in the implementation of the 1995 
Non-Proliferation Treaty (NPT) Resolution on the Middle East. However, there were no new 
developments during the reporting period.  

Combating terrorism 

The EU and Israel continued to express strong mutual interest in deepening collaboration in 
this area. In September 2010 a Workshop on Terrorist Financing & Money Laundering took 
place in Brussels,  with  the participation  of experts from Israel, the  EU and  the  EU member 
states. 

International organisations  

In line with the common objective of promoting effective multilateralism, the EU and Israel 
continued to develop regular contacts on a number of matters of mutual interest. This included 
discussions  on  UN-related  matters,  such  as human  rights  (including  a  review  of  the  Human 
Rights Council), climate change, sustainable development and the preparations for the Rio+20 
Conference,  the  International  Criminal  Court,  UN  peacekeeping  and EU  participation  in  the 
UN General Assembly.  

In  2010,  Israel  became  a  member  of  the  Organisation  for  Economic  Cooperation  and 
Development (OECD). 

Regional cooperation  

There  was  no  substantial  progress  on  trilateral  cooperation,  which  would  involve  Israel,  the 
Palestinian Authority and the EU and would cover trade, transport and energy. 

3. 

ECONOMIC AND SOCIAL COOPERATION 

Macroeconomic framework  

The  2010  recovery  of  the  Israeli  economy  from  the  global  economic  downturn  was  much 
faster than in the major developed economies. Output expanded by 4.5 % in 2010, reflecting a 
strong  rebound  of  private  consumption  and  recovery  in  fixed  investment.  The  recovery 
encompassed  most  industrial  sectors  of  the  economy  and  had  a  significant  impact  on 
unemployment.  

Average  inflation  decreased  from  3.3 %  in  2009  to  2.8 %  in  2010.  The  real  exchange  rate 
remained strong, which has helped to curb imported inflation. The main inflation drivers were 
rising prices for food and, in particular, housing. If these factors are excluded, core inflation 
was  recorded  at  around  1.1 %.  The  government  took  measures  to  alleviate  the  housing 

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shortage  and  prevent  the  expansion  of  the  real-estate  bubble.  These  measures  included  a 
reduction  in  the  taxation of capital  gains on land and incentives for  contractors  to complete 
projects more rapidly. 

In 2010 the shekel (NIS) continued to appreciate (5.8 % against the USD and 12.7 % against 
the EURO), supported by the strong recovery of the economy, the current account surplus and 
the  wide  interest-rate  differential  with  key  developed  economies.  The  Bank  of  Israel 
continued to intervene in foreign exchange markets to prevent damage to exports as a result of 
rapid appreciation. This policy led to the accumulation of around USD 70 billion (EUR 52.5 
billion)  in  foreign  reserves,  which  entails  significant  sterilisation  costs  and  undermines  the 
credibility of the free-floating exchange-rate regime.  

The fiscal deficit narrowed from 5.1 % of GDP in 2009 to around 3.7 % of GDP in 2010, on 
the  back  of  the  economic  recovery  and  the  effective  curbing  of  public  expenditure.  Fiscal 
consolidation should continue in order to bring public debt — at 76.2 % of GDP in 2010 — 
onto a downward path and support monetary policy in its fight against inflation. This would 
allow  for  a  more  gradual  tightening  of  monetary  policy  and  a  softer  impact  on 
competitiveness.  The  authorities  are  committed  to  ensuring  fiscal  discipline  by  establishing 
biannual  targets  on  the  fiscal  deficit  and  ceilings  on  real  expenditure  growth.  Their 
implementation will require regular spending reviews at all levels, as well as enforcement of 
tax collection, especially of indirect taxes. The establishment in the ministry of finance of a 
commission to examine the tax treatment of non-renewable resources is a positive step, as the 
appropriate  use  of  the  proceeds  can  facilitate  the  implementation  of  several  policy  options, 
such as the reduction of public debt or even the establishment of a sovereign wealth fund. 

The  external  sector  was  challenged  by  a  15 %  real  appreciation  of  the  shekel  in  2010. 
Nevertheless, the current account balance remained positive, even though the surplus slightly 
narrowed from 3.9 % of GDP to 3.1 % of GDP in 2009. This was the result of a deterioration 
in the trade balance. Tourist flows also contributed to the current account surplus with a 26 % 
increase in arrivals. 

Employment and social policy 

A  poverty  report  by  the  National  Insurance  Institute,  published  in  November  2010,  shows 
that 24 % of the Israeli population lived below the poverty line in 2009 compared with 22 % in 
2008).  Poverty  is  concentrated  among  the  20 %  of  the  population  belonging  to  the  Arab 
minority (of whom 57 % live below the poverty line) and the estimated 10 % who are ultra-
orthodox  Jews  (of  whom  60 %  live  below  the  poverty  line).  The  number  of  poor  families 
increased in 2009 in both the Arab-Israeli and ultra-orthodox communities. According to the 
same report, poverty among the elderly decreased from 22.7 % in 2008 to 20.1 % in 2009. 

The  impact  of  the  global  financial  and  economic  crisis  had  been  relatively  moderate  on 
Israel's economy and labour market. In the context of fast recovery, the unemployment rate 
dropped  to  6.6 %  in  2010.  The  majority  of  the  newly  employed  found  jobs  in  the  public 
service. Few of them found jobs in the business sector. Nevertheless, unemployment rates in 
the  Arab  and  Ultra  Orthodox  populations  (Haredim)  remain  high  (around  27 %  and  65 % 
respectively). Labour market participation is extremely low in both groups, especially among 
Arab-Israeli women and Haredim men. The issue of severe under-employment of Arab-Israeli 
women was raised during OECD negotiations, but few significant measures have been taken. 
The level of Haredim participation in the labour market is low, mostly due to a preference for 
full-time religious study among men. Both groups already represent a fifth of the working age 

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population.  Boosting  their  labour  market  participation  represents  a  major  challenge.  With  a 
view to rebalancing the socio-economic development between the centre and the periphery of 
the country, an Action Plan exists that targets investment, innovation and skills development 
in the periphery regions. 

In the area of social inclusion, the situation of the Arab-Israeli minority remains a matter of 
concern.  Only  slightly  more  than  a  third  of  Arab  youngsters  complete  high  school  with  a 
matriculation certificate. People with disabilities (about one fifth of the population) earn about 
34 %  less  than  the  national  average. In  the  first  quarter  of  2010,  the  Israeli  government 
discontinued  the  reform  plan  on  the  welfare  of  workers  earning  low  salaries  by  means  of 
income  tax  credits,  despite  the  Bank  of  Israel’s  recommendation  to  extend  the  programme 
across the country and to increase grants.  

As regards social dialogue, the 2009 legislation on employee rights in the workplace started 
producing effects. Women’s participation in social, economic and political life continued to 
improve. The EU financed a twinning project with ENPI bilateral funds, aimed at providing 
support to the Equal Employment Opportunities Commission. 

4. 

TRADE-RELATED ISSUES, MARKET AND REGULATORY REFORM  

The EU remains Israel's first trading partner. Exports to the EU increased by 24.4 % and EU 
exports to Israel increased by 26.2 %. Significant progress was made in tackling market access 
barriers in Israel in the first half of 2010 by means of a more intensive dialogue with the EU 
side.  However,  some  issues  remain  open,  including  sanitary  and  phyto-sanitary  matters  and 
technical barriers to trade. No significant progress can be reported on the implementation of 
the customs-related part of the Action Plan.  

In  the  area  of  agriculture  overall  trade  in  agricultural  products,  processed  agricultural 
products  and  fish  and  fishery  products  further  increased  following  the  entry  into  force,  in 
January 2010, of the new Agreement in the form of an Exchange of Letters. Bilateral dialogue 
on  Geographical  Indications  continued  during  the  reporting  period.On  free  movement  of 
goods  and  technical  regulations,  the  EU-Israel  ACAA  agreement  on  good  manufacturing 
practice for pharmaceutical products was signed in May 2010. The European Parliament still 
has to give it its consent. Other priority sectors include pressure vessels and medical devices, 
and  possibly  machinery.  The  Standards  Institute  of  Israel    started  in  July  2010  a  review 
process of the Israeli Standard on safety of toys in order to adopt the European Standard. 

In  the  field  of  consumer  protection  the  regulations  regarding  the  cancellation  of  a  deal  by 
consumers  within  30  days  and  the  right  to  receive  their  money  back  entered  into  force  in 
December 2010.  

In 2010 the EU and Israel stepped up sanitary and phyto-sanitary cooperation through the 
preparation  of  a  twinning  project  that  aims  to  strengthen  veterinary  administration.  Israel 
continued  the  process  of  updating  legislation.  In  February  2010  Israel  connected  to  the 
external  window  of  the  EU’s  rapid  alert  system  for  food  and  feed  (RASFF).  The  Knesset 
Committee of Health tabled a draft law setting up a national authority for the supervision of 
food.  In  May  2010  the  European  Commission’s  Food  and  Veterinary  Office  (FVO)  carried 
out  a  mission  to  Israel  on  pesticide  controls  in  fruit  and  vegetables,  which  identified  some 
weaknesses in the control system. In November 2010,the FVO carried out an inspection visit 
on  the  control  of  residues  and  contaminants  in  live  animals  and  animal  products,  including 

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controls on veterinary medicinal products. In January 2010, in cooperation with the EU, Israel 
managed successfully an outbreak of the highly pathogenic avian influenza. 

In line with the ENP Action Plan, the EU-Israel annual Business Dialogue (EUIBD) meeting 
took  place  in  December  2010.  The  EUIBD  provides  for  flexible  arrangements  and 
opportunities for business contacts between the EU and Israel; however the dialogue could be 
better structured and its visibility increased. 

No substantial progress can be reported with respect to company law. During the reporting 
period  Israel  started  work  on  amendments  to  the  regulation  requiring  companies  to  submit 
documents to the Companies Registrar not only in Hebrew but also in English. The Corporate 
Governance Act is still under consideration in the Knesset. In 2011, for the first time since the 
entry  into  force  of  the  Companies  Law  in  Israel  in  1999,  the  Israeli  Corporations  Authority 
will  start  to  impose  fines  on  companies  registered  in  Israel  which  have  been  failing  to  pay 
annual fees and submit annual reports. The business licensing reform passed the first reading 
in parliament in August 2010. According to the proposed reform, the licensing process will be 
expedited and the specifications will be standardised. 

In  the  area  of  accounting,  SMEs  in  Israel  will  be  entitled  to  implement  the  International 
Financial Reporting Standards for SMEs in their financial reports as of 2011.  

No progress was reported in the area of auditing.  

There were no new developments in the bilateral negotiations for the liberalisation of services 
and establishment in 2010.  

In the field of financial services, in March 2010 the parliament adopted a new Bank of Israel 
Law.  Monetary  policy  and  decisions  are  determined  by  the  Monetary  Committee.  An 
Administrative  Council  was  also  established  to  supervise  the  orderly  and  efficient 
management  of  the  Bank.  The  new  law  provides  a  strong  foundation  for  the  monetary  and 
exchange  rate  regime,  although  some  aspects  of  its  implementation,  including  the  precise 
function of the Monetary Committee, have yet to be clarified. 

The banking sector remained stable in 2010 and the number of impaired loans fell. A series of 
regulatory and supervisory measures implemented in 2010 should contribute to strengthening 
further  the  stability  of  banks  and  non-bank  financial  institutions.  Banks  were  required  to 
increase core capital by at least 7.5 %, while measures concerning supervision, transparency 
and  risk  management  were  implemented  in  the  non-bank  sector  and  with  institutional 
investors.  However,  there  is  room  for  improvement  in  stress-testing  procedures  and 
supervision  in  the  corporate  bonds  market.  There  should  be  greater  coordination  among  the 
three  regulatory  bodies  of  the  financial  sector,  as  many  market  operators  are  active  in  a 
number of supervisory fields. 

In August 2010 the parliament approved a law setting up a special economic affairs court to 
hear corporate and securities cases.  

Other key areas 

A  new  agreement  on  avoidance  of  double  taxation  between  Israel  and  Estonia  entered  into 
force in January 2010 and a similar agreement with Austria was initialled in July 2010. 

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With  regard  to  competition  policy,  in  July  2010  the  Ministerial  Committee  for  Legislation 
approved an amendment to the Anti Trust Law, which would empower the Israel Anti Trust 
Authority to deal with the concentrations distorting competition. The draft law was submitted 
to the parliament. No progress can be reported in the field of state aid. 

In  the  area  of  intellectual  property  rights,  Israel  joined  the  Madrid  Protocol  in  September 
2010. As a result, Israelis can apply for international registration of trade marks via the Israeli 
Patents  and  Trade  Marks  Authority.  According  to  independent  sources,  Israel's  software 
piracy levels are below the EU average. 

In  the  area  of  public  procurement,  a  regulation  entered  into  force  in  July  2010  obliging 
foreign  suppliers  who  win  Israeli  local  authorities'  tenders  for  over  USD  5  million  (EUR 
3.772 million) to purchase goods in return worth 20-35 % of the deal’s value, preferably from 
the same city/town.  

Following  the  expansion  of  the  regulations  pertaining  to  industrial  cooperation,  and  their 
application  to  contracts  to  be  issued  to  foreign  companies  by  health  care  organisations  and 
other  public  entities,  as  of  August  2010  international  pharmaceutical  companies  and  the 
manufacturers of medical equipment are required to carry out offset purchases with the State 
of  Israel.  In  December  2010  a  new  law  obliged  the  ministry  of  defence,  the  ministry  of 
internal security and the Israeli Defence Force to give preference to local textiles producers in 
their  tenders  (which  are  up  to  50 %  more  expensive).  This  law  will  be  valid  for  two  years. 
These  preferences  apply  except  where  they  run  counter  to  Israel’s  commitments  under 
international agreements. 

The  Israel  Central  Bureau  of  Statistics  participated  in  the  activities  of  the  MEDSTAT  III 
programme  launched  in  2010,  in  particular  in  the  areas  of  migration,  social  policy,  trade, 
energy,  transport  and  agriculture,  thereby  also  continuing  cooperation  with  its  neighbouring 
countries.  Moreover,  it  cooperates  in  the  context  of  the  environmental  statistics  programme 
for ENP countries on a Shared Environmental Information System ‘SEIS’.  

On  enterprise  policy,  Israel  continued  to  participate  in  industrial  cooperation  activities, 
including the implementation of the Euro-Mediterranean Charter for Enterprise.  

5. 

COOPERATION ON JUSTICE, FREEDOM AND SECURITY  

Regarding the fight against organised crime, Israel has not ratified the remaining Protocol to 
the  2003  United  Nations  Convention  on  Transnational  Organised  Crime  on  the  Illicit 
Manufacturing of and Trafficking in Firearms, their Parts, Components and Ammunition.  

With an estimated figure of 33,000 asylum seekers currently in Israel, the country still lacks a 
consolidated and consistent policy and legislation on asylum and its authorities follow a very 
restrictive approach towards asylum seekers.  The country's policy in the field of asylum was 
considered also, in the course of 2010, to be revised into further restrictive terms through an 
Anti-Infiltration  bill,  but  the  latter  eventually  was  no  longer  adopted.  The  Israeli  authorities 
have  yet  to  set  in  place  a  functioning  Refugee  Status  Determination  procedure.  Beyond  the 
detention period where treatment is granted, the state does not provide asylum seekers with 
the  right  to  work,  nor  basic  medical  and  social  services,  despite  the  fact  that  a  significant 
number  of  asylum  seekers  who  arrive  to  Israel  have  been  victims  of  systematic  abuse  and 
torture  perpetrated  by  smugglers  in  the  Sinai  desert.  Furthermore,  Israel  has  difficulties  in 

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adequately  coping,  from  a  legal  and  administrative  point  of  view,  with  the  fact  that  it  has 
become the country of destination for an increasing number of irregular migrants and asylum 
seekers from several African countries, who reach its borders coming from Egypt.  In order to 
react  to  this  fact,  in  July  2010  the  government  decided  to  accelerate  the  construction  of  a 
fence along the southern border, and in November 2010 it approved the establishment of an 
open detention centre near the Egyptian border in order to meet asylum seekers' basic needs.  

On the fight against trafficking of human beings, a draft legislative measure proposing penal 
sentences for purchasers of sexual services, with a provision for an educational rehabilitation 
reprieve  for  first-time  offenders,  has  not  yet  been  discussed  in  the  Knesset  (Israeli 
parliament).  The  NGO  Task  Force  on  Human  Trafficking  petitioned  the  Supreme  Court  in 
July  2010  to  ban  advertising  for  women’s  sexual  services  in  public  media.  Israel  remains  a 
destination  for  persons  trafficked  for  sexual  exploitation.  While  law  enforcement  agencies 
continued  working  against  human  trafficking,  Israel’s  actions  fall  short  of  minimum 
international  standards.  Renewed  attention  needs  to  be  paid  to  the  rehabilitation  of  victims, 
including  housing  and  medical  service  support,  in  the  context  of  the  implementation  of  the 
national plan to combat human trafficking. 

In the area of the fight against drugs, in July 2010 the Knesset outlawed the sale of alcohol at 
night time in non-catering establishments (for example petrol stations, pharmacies) as a means 
of addressing the growing problem of youth alcoholism, particularly in the 11-15 age group. 
Increased police crackdowns reduced access to recreational drugs such as marijuana, leading 
to an increase in its local production and smuggling networks to Egypt and Lebanon. There 
has still not been any sustained follow up to the recommendations of the Mini Dublin Group 
on  establishing  a  central  anti-drug  unit  within  the  Israeli  police  as  well  as  on  maintaining 
accurate  records  of  information  exchange  with  neighbouring  countries  on  precursors.  Drug 
trafficking, with its links to national and international organised crime networks, remains an 
issue of concern. In October 2010 Israel took an active part in the regional Euro-Med Police II 
programme on drug cooperation alongside its ENP neighbours as well as in the ENP regional 
seminar on the EU drug monitoring system organised by the European Monitoring Centre for 
Drugs and Drug Addiction (EMCDDA) and the EU in Brussels. 

Concerning  the  fight  against  money  laundering,  a  draft  law  extending  the  anti-money 
laundering  regime  to  trade  in  precious  stones  passed  its  first  reading  in  the  Knesset  in 
December  with  second  and  third  readings  foreseen  in  2011.  It  places  significant  obligations 
on dealers with respect to client identification, transaction reporting and record retention for at 
least  five  years  vis-à-vis  the  Israel  Money  Laundering  Prohibition  Authority.  In  December 
2010,  Israel  signed  and  ratified  the  Framework  Convention  of  the  International  Anti-
Corruption Academy, thus facilitating future international cooperation in education, training 
and research against corruption in the framework of the United Nations Office on Drugs and 
Crime.  As  was  the  case  in  2009,  the  supervision  authorities  continued  implementing  the 
national control regime based upon the 40 plus 9 Special Recommendations of the Financial 
Action Task Force. Due diligence, ‘Know Your Customer’ (KYC) and ‘Know Your Business’ 
(KYB)  practices  continued  to  be  implemented  within  financial  institutions  and  the  financial 
services industry in line with statutory obligations. 

As  regards  data  protection,  the  Israeli  Law,  Information  and  Technology  Authority 
organised a final conference for the Twinning project on data protection in November 2010 
highlighting  increased  public  awareness  in  various  sectors  such  as  telecommunications, 
international  data  transfers  and  economic  outsourcing.  On  31  January  2011  the  European 
Commission  adopted  a  decision  on  the  basis  of  Directive  95/46/EC,  declaring  the  level  of 

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personal  data  protection  in  Israel  to  be  adequate.In  the  field  of  police  and  judicial 
cooperation,  Europol  approved  a  mandate  for  negotiations  with  Israel  on  an  Operational 
Agreement including a provision that data processing be undertaken in line with international 
law  and  that  information  sourced  from  the  occupied  Palestinian  territory  be  marked  in 
advance in a manner identifiable by the EU member state law enforcement authorities.  

In November 2010 the Israeli Law, Information and Technology Authority organised a final 
conference  for  the  Twinning  project  on  data  protection,  highlighting  increased  public 
awareness  in  various  sectors  such  as  telecommunications,  international  data  transfers  and 
economic outsourcing.  

As  regards  civil  judicial  cooperation,  Israel  expressed  interest  in  acceding  to  the  Lugano 
Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and 
Commercial  matters.  Israel  is  not  yet  a  party  to  the  1996  Hague  Convention  on  Child 
Protection to which all EU member states will soon accede.  

In  2010,  Israel  began  implementing  its  obligations  under  the  UN  Convention  against 
Corruption. In international surveys on corruption perception Israel ranks at a level similar to 
EU member states. 

6. 

TRANSPORT, ENERGY, ENVIRONMENT, THE INFORMATION SOCIETY, RESEARCH AND 
DEVELOPMENT, SCIENCE AND TECHNOLOGY  

In  implementing  its  transport  policy,  Israel  continued  to  focus  on  the  development  of 
integrated transport systems, with a particular emphasis on transport safety and increasing the 
share  of  public  transport.  In  June  2010  Israel  opened  up  the  public  transport  market  by 
releasing  17 %  of  the  routes  of  the  public  transport  operator  (Egged)  for  competition. 
According to the ministry of transport and road safety (MoT), since the start of the reform in 
public transport 10 new public transport operators have entered the market with a combined 
market share of about 30 %.  

Following the cancellation of the tender for the Tel Aviv Light Train, the government decided 
to  finance  this  project  in  late  2010.  The  estimated  cost  is  NIS  11  billion  (EUR  2.2  billion). 
This so-called ‘Red Line’ is intended to carry 120 million passengers a year. Mass transit use 
is expected to increase to 430 million passengers a year by 2030. 

In  the  field  of  civil  aviation,  Israel  is  committed  to  making  progress  on  the  signing  of  a 
comprehensive aviation agreement with the EU in 2011 following the successful conclusion 
of a horizontal agreement in 2008. In 2010 the State Controller criticised the Civil Aviation 
Authority for failing to maintain proper standards of aviation safety. Israel needs to increase 
resources further in order to ensure efficient safety oversight of air carriers.  

As  regards  the  maritime  sector  two  regulations  entered  into  force  in  mid  2010  aimed  at 
ensuring  higher  safety  standards.  One  requires  Port  Service  Vessels  to  install  electronic 
equipment to enable the Port Control Station to keep a constant watch on the movements and 
location  of  port  service  craft.  The  other,  issued  as  a  result  of  recommendations  by  the 
International  Maritime  Organisation,  defines  the  safety  measures  surrounding  the  transit  of 
certain  types  of  dangerous  cargo.  Israel  operates  a  very  effective  Port  State  Control  (PSC) 
system and remained on the White List of the Paris MoU on PSC. 

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In August 2010 Israel initiated the development of an energy master plan for the period up to 
2050. The future strategy aims at reducing dependence on fossil fuels, using more renewable 
energy  and  increasing  energy  efficiency.  The  option  to  use  nuclear  generated  electricity 
remains  open.  In  December  2010  the  ministry  of  national  infrastructures  approved  an 
electricity sector development plan that provides for additional electricity capacity to be built 
in the next few years. Extensive offshore gas discoveries in 2009 and 2010 provide Israel with 
new  perspectives  for  greater  security  of  energy  supply.  In  this  context,  Israel  established  a 
committee to propose a fiscal policy conducive to the development of the new resources. The 
committee’s  recommendations  were  published  in  January  2011.  In  August  2010  Israel 
approved  a  plan  to  connect  the  Tamar  offshore  natural  gas  well  (near  Haifa)  with  Ashdod. 
Gas  deliveries  are  expected  to  start  by  2013.  Also  in  August  2010  Israel  launched  the 
construction of the first (private) independent power producer in the country. Israel continued 
to  construct  internal  gas  pipelines  and  to  assess  the  feasibility  of  constructing  a  Liquefied 
Natural  Gas  facility.  Israel  adapted  the  Ashkelon-Eilat  oil  pipeline  to  facilitate  possible 
Russian and  Caspian oil transportation. In July 2010 the Ministry  of  National Infrastructure 
adopted  an  energy  efficiency  plan  2010-2020.  Israel  continued  to  implement  energy 
efficiency measures, in particular with respect to lighting, domestic appliances and the hotel 
sector. In December 2010 Israel adopted a master plan for photovoltaic installations of up to 
750  hectares.  It  promoted  the  use  of  renewable  energy  sources  and  implemented  measures 
with  respect  to  solar  energy  in  particular.  This  has  contributed  towards  developing  and 
implementing the Mediterranean Solar Plan.  

The EU remains committed to re-activating trilateral energy cooperation with Israel and the 
Palestinian  Authority,  currently  stalled  because  of  the  regional  conflict.  The  aim  is  still  to 
establish  a  joint  energy  office,  thus  facilitating  the  development  of  projects  of  common 
interest, such as the joint ‘Solar for Peace’ initiative.  

In  the  field  of  climate  change,  Israel  submitted  its  Second  National  Communication  to  the 
UN  Framework  Convention  on  Climate  Change.  A  pilot  project  for  a  voluntary  greenhouse 
gas  registry  was  launched.  Participating  organisations  will  report  on  their  greenhouse  gas 
emissions once a year, with the first report on 2010 emissions due in June 2011.  

Israel  prepared  and  approved  additional  Clean  Development  Mechanism  Projects.  Three  of 
these new projects were registered at the UN level, bringing the overall number of registered 
projects to 19.  

Israel is encouraged to fully implement the Cancun agreement and in particular devise a low 
carbon  development  strategy  including  update  information  on  target  or  actions  that  it  will 
implement. 

Regarding environment, Israel adopted new legislation on waste packaging, as well as new 
regulations  on  noise  reduction  and  on  the  disclosure  of  information  by  corporations  on  the 
environmental  risks  of  their  operations.  New  or  amended  legal  instruments  on  asbestos,  the 
marine  environment,  enforcement,  wildlife  protection  and  non-ionising  radiation  are  still 
under preparation. Preparations started for a National Air Pollution Abatement Programme for 
2011–2020.  Israel  published  also  a  National  Biodiversity  Strategy  and  Action  Plan.  Work 
continued  on  implementing  existing  strategies  and  plans,  where  continuous  attention  is 
required.  

Israel  took  steps  to  integrate  environmental  considerations  in  other  policy  areas,  such  as 
energy. Israel drove forward the Integrated Pollution Prevention and Control legislation from 
a  pilot  phase  to  a  full-scale  operation  by  sector  (due  to  start  in  2011).  The  ministry  of 

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environmental protection published a state of the environment report, continued to distribute 
environmental information on a regular basis, and carried out activities to inform and involve 
the  public.  The  implementation  of  a  2010-2012  work  plan  on  the  Pollutant  Release  and 
Transfer Register has started. 

There were no significant developments in the reporting period with respect to the ratification 
of  the  remaining  Protocols  of  the  Barcelona  Convention  for  the  Protection  of  the  Marine 
Environment  and  the  Coastal  Region  of  the  Mediterranean,  nor  the  ratification  of  the 
Gaborone  Amendment  to  the  Convention  on  International  Trade  in  Endangered  Species  of 
Wild Fauna and Flora (CITES). Israel continued to participate in the Horizon 2020 Initiative 
and in the EU Water Initiative. Cooperation and information exchange took place between the 
EU  and  Israel  on  eco-system  services,  water,  de-pollution  and  the  management  of 
environmental information.  

In the field of civil protection, the Community Civil Protection Mechanism was mobilised in 
December 2010 in response to Israel’s request for assistance in combating forest fires. Israel 
was actively involved in the Euro-Mediterranean Programme for the Prevention, Preparedness 
and  Response  to  natural  and  man-made  Disasters,  which  reached  the  mid-term  phase  of  its 
implementation.  

As  regards  the  information  society  sector,  in  March  2010  the  minister  of  communications 
and  the  minister  of  finance  empowered  a  new  public  committee  which  is  to  present  its 
recommendations  on  the  creation  of  a  new  regulatory  framework  on  universal  service 
operators  and  interconnection  tariffs.  The  adoption  of  the  revised  regulatory  framework  is 
foreseen in 2011.  

The ministry of communications issued regulations aimed at encouraging competition in the 
mobile  telephony  market.  Six  Mobile  Virtual  Network  Operators  (MVNO)  were  granted 
licences allowing them to enter the market. Other MVNO applications are being considered. 
Moreover,  a  reform  package  was  introduced  with  a  view  to  making  it  easier  to  switch  to  a 
different provider of mobile telephony services, including shorter maximum contract periods, 
improved implementation of number portability, and lower penalties for contract termination. 
Following  a  long  review  and  hearing  of  the  four  mobile  operators,  in  September  2010  the 
ministry  of  communications  decided  to  reduce  mobile  operators'  termination  rates  by  over 
70 %. The reduction will take place gradually, from 1 January 2011 until 2014, and will help 
reduce competitive distortions in the market.  

Israel  made  significant  progress  in  developing  eHealth  applications.  By  2010  it  had 
established  a  nation-wide  health  information  network.  Electronic  medical  records  and  e-
prescriptions are used by virtually all the population and physicians. 

As regards the audiovisual sector, in early 2010 the ministry of communications announced 
the  establishment  of  an  independent  National  Telecommunications  Authority  that  would 
replace  the  ministry.  The  Authority  would  include  the  Broadcasting  Authority,  which 
is currently the body in charge of public broadcasting.  

In the area of science and technology, the already extensive cooperation between the EU and 
Israel  was  further  boosted.  Israel  has  been  involved  in  the  7th  Framework  Programme  for 
Research  and  Development  (FP7)  as  from  its  inception.  As  a  result  of  the  association  Israel 
pays a financial contribution to the overall EU budget calculated on the basis of its GDP. Since 
the beginning of the FP7 the participation of Israel in all thematic areas of the FP7 has been 

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steadily growing. By April 2011, 754 grant agreements were concluded involving 919 Israeli 
research  entities.  Additional  88  proposals  involving  111  Israeli  research  entities  have  been 
selected  for  funding  and  the  grants  are  currently  under  negotiation.  The  research  themes  in 
which  Israeli  research  teams  are  particularly  strong  are  Information  and  Communication 
Technologies  and  Health  as  well  as  in  the  Ideas  programme.  The  performance  of  Israeli 
universities  and  research  institutes  is  particularly  strong,  with  these  organisations  receiving 
some 70.3% of the overall funding of EUR 352 million going to Israeli participants.  

Israeli researchers and enterprises are also participating successfully in research actions under 
the Joint Technology Initiatives set up pursuant to Article 187 of the Treaty on the functioning 
of the European Union. 

7. 

PEOPLE-TO-PEOPLE CONTACTS, EDUCATION AND HEALTH 

In November 2010, a second bilateral meeting on the implementation of the Joint Declaration 
with the European Commission on cooperation and dialogue on education and training took 
place  in  Jerusalem  with  exchanges  of  views  on  approaches  to  lifelong  learning,  and  the 
activation of the ‘people to people’ dimension of the EU-Israel Action Plan.  

The  Council  of  Higher  Education  adopted  a  new  strategy  in  March  2010  and  established  a 
new division on quality evaluation. The ministry of education proposed a 50 % increase in the 
higher education budget by 2013 to support its six-year plan to reinvigorate higher education 
by  encouraging  excellence  and  improving  teaching  quality.  While  Israeli  Arabs  comprise 
20 % of the university-aged population, only one in ten is enrolled in an Israeli university or 
other higher education institution. Additional efforts are required to redress this situation and 
to remove obstacles to higher education for Israeli Arabs. In the area of vocational training, 
the ministry started planning to modernise technological education with a view to increasing 
student  numbers  by  10 %  by  2015.  Israeli  stakeholders,  including  the  ministry,  participated 
actively in the self-assessment of vocational education and training under the Torino Process. 
The  findings  highlighted  the  need  to  increase  its  attractiveness,  improve  skills  relevance  to 
labour-market needs and promote social inclusion and employment for disadvantaged groups 
and  for  people  living  in  peripheral  regions.  Formalised  mechanisms  are  also  needed  to 
enhance education and business cooperation.  

Israel participated in the third Call for Proposals for Tempus IV. Two projects were selected, 
beginning  in  the  academic  year  2010-11.  The  Council  of  Higher  Education  increased  staff 
resources in the National Tempus Office. However, greater visibility should be given to the 
role  of  the  Higher  Education  Reform  Experts  in  promoting  institutional  reforms  relevant  to 
the Bologna Process. 

In addition, six Israeli students benefited from Erasmus Mundus Masters scholarships while 
student and academic mobility is expected  to benefit from 53 grants under Action 2 for the 
academic  year  2010-11.  In  2010  a  new  Jean  Monnet  Chair  in  European  Integration  was 
awarded  to  Ben  Gurion  University  in  the  Negev.  Israeli  universities  are  encouraged  to 
continue submitting high-level applications under the Jean Monnet programme. 

In  the  field  of  culture,  eight  projects  were  selected  under  a  call  for  proposals  for  local  and 
regional cultural activities including audiovisual and Arab-Israeli intercultural cooperation. At 
regional level, Israel was an active participant in the Euro-Med Heritage IV programme. As 
Israel is not party to the 2005 UNESCO Convention on the Protection and Promotion of the 

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Diversity  of  Cultural  Expressions,  there  has  been  no  dialogue  or  exchange  of  views  on 
cultural and audiovisual policy. On the same grounds, Israeli cultural organisations could not 
participate  in  the  call  for  proposals  for  the  2010  ENP  Special  Action  under  the  Culture 
Programme. 

The  ministry  of  education  continued  to  support  the  development  of  youth  exchanges, 
informal  education  provision  and  intercultural  dialogue  within  the  context  of  Israel’s 
participation  in  the  Youth  in  Action  programme.  The  ministries  of  education  and  foreign 
affairs confirmed Israel’s participation in the Euro Med Youth IV programme in September 
2010,  when  a  new  Financing  Agreement  was  signed  for  the  total  cost  of  EUR  560.000  for 
Israel’s participation in the programme and a Euromed Youth Unit established in the ministry 
of education.  

The EU Delegation continues to make extensive contacts with representatives of Israeli civil 
society. In all, 142 proposals were received under the 2010 EU Partnership for Peace call for 
proposals while 10 projects were funded under the European Instrument for Democracy and 
Human Rights (EIDHR) A successful means of developing links between Israeli and EU civil 
society within the ENP framework is still being sought.  

Israel  and  the  EU  stepped  up  their  dialogue  in  the  health  sector.  In  2010  Israel  started  to 
explore  possibilities  for  cooperation  with  the  European  Centre  for  Disease  Prevention  and 
Control. In the context of last year’s influenza A(H1N1) epidemic, in January 2010 the EU 
proposed 
the  exchange  of 
epidemiological information in the event of a health crisis. Israel continued to participate in 
the  ‘Episouth’  network  on  communicable  diseases  for  the  EU,  Mediterranean  and  Balkan 
countries.  

to  establish  communication  channels  with  Israel  for 

8. 

FINANCIAL COOPERATION — 2010 KEY FACTS AND FIGURES  

Cooperation framework 

Under the National Indicative Programme (NIP) 2011-2013, the European Neighbourhood and 
Partnership  Instrument  (ENPI)  appropriation  for  Israel  stands  at  EUR  6  million.  The  NIP  is 
geared  towards  supporting  the  achievement  of  key  policy  objectives  as  outlined  in  the  EU-
Israel Action Plan and the approximation of Israeli norms and standards to those of the EU.  

Implementation 

Implementation of the measures covered by the 2007 Annual Action Programme (AAP) is now 
complete. There is however no established project pipeline for 2010 and the implementation of 
the ENPI bilateral allocation faces challenges. 

In  addition  to  the  bilateral  allocation,  Israel  benefited  from  cooperation  activities  financed 
under the ENPI cross-border, inter-regional and regional programmes, such as the Partnership 
for  Peace  Programme  for  civil  society  organisations.  Israel  participates  in  the  Cross-Border 
Cooperation (CBC) Mediterranean Sea Basin programme (EUR 173.6 million for the whole 
programme throughout the period 2007-13). The main priorities of the Programme are four-
fold:  (i)  promotion  of  socio-economic  development  and  enhancement  of  territories;  (ii) 
promotion  of  environmental  sustainability  at  the  basin  level;  (iii)  promotion  of  better 

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conditions  and  modalities  for  ensuring  the  mobility  of  persons,  goods  and  capital;  and  (iv) 
promotion of cultural dialogue and local governance. 

Other  EU  Instruments  supplement  the  ENPI  assistance  package.  Israel  benefited  from 
cooperation activities financed under horizontal instruments such as the European Instrument 
for Democracy and Human Rights (EIDHR) (EUR 1.3 million).  

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