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Economic fallout for Israel if peace talks break down

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Manuel Balce Ceneta/AP/File

(Read caption) Secretary of State John Kerry, right, with Israeli Foreign Minister Avigdor Liebermann, speaks to reporters at the State Department in Washington last week. By keeping talks going with the Palestinians, Israel hopes to avoid European sanctions or a boycott.

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In the court of public opinion, the verdict on a recent round of peace talks between Israel and the Palestinians is already out: They're dead. Almost no one expects the parties to reach a "framework agreement" by a US-imposed deadline of April 29. "It looks like they're stuck," our correspondent in Jerusalem puts it plainly.

But from Israel's side, there is at least one quite convincing reason to try and keep the talks going past the end of the month. The economy is already jittery over the possibility that a boycott and sanctions campaign in Europe could gain momentum.

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"We see some Israeli concern over the possible fallouts. Israel fears that if the negotiations do break down and they are the ones blamed for it, these kinds of boycott and sanctions arguments could get more traction," our correspondent explains.

Recommended:10 brands you'll have to give up if you're boycotting Israel

The calls for economic measures against Israel have been around or years, but until recently, they seemed far fetched. That is slowly changing in Europe, where the movement has gained steam. Private investors, foundations, even pension funds have begun to pull some investments. The Palestinian authority has particularly asked supporters to boycott any Israeli products or firms located in settlements in the occupied territories.

That could accelerate if talks break down, our reporter says....  For the rest of the story, continue reading at our new business publication Monitor Global Outlook.