Alarm bells went off in several European capitals when the Israeli Cabinet adopted the proposed transparency bill, tagging those Israeli associations that are mainly receiving their funding from foreign sources, to warn their Israeli interlocutors.

Almost every European Union government and a multitude of European foundations are contributing to Israeli human rights, nongovernmental organizations and peace organizations that conform to European values (Peace Now is an example).

A senior source in the Israeli Foreign Ministry in charge of EU relations told Al-Monitor on condition of anonymity that Israeli ambassadors in many EU capitals have sent alarming reports to the ministry about growing concern by senior European officials over what they perceive as deterioration in the strength of Israeli democracy.

The EU is Israel’s main trading partner. Israel’s special status agreements with Brussels are of strategic value to its economy, academia and scientific research. Europe’s political affinity for Israel is based on historic support as well as the kinship to Israel’s Western democracy. Relationships with some European countries, such as the Scandinavian countries, are strained by fundamental disagreements on the Palestinian issue and sharp criticism of Israel’s occupation and settlement policies. Yet the fundamental political-economic alliance with Israel has been sustained, despite the crisis in the Middle Eastern peace process and wars in which Israel has engaged.