The European Union’s ambassador to Israel warned the Jewish State that it would likely endure “increasing isolation” if peace talks with the Palestinians collapse.

Lars Faaborg-Andersen told Israel’s Channel 2 TV Monday that such a scenario wouldn’t necessarily be a result of European policy, but rather the actions of private companies.

The ambassador’s comments echo earlier statements he made in late January.

“If the talks are wrecked as a result of an Israeli settlement [construction] announcement, then the blame will be put squarely on Israel’s doorstep,” the EU envoy said on January 22. If Israel’s actions result in the talks’ breakdown, “naturally and logically [Israel] will be to blame,” he said then.

“If Israel continues to expand its presence beyond the Green Line, without a peace agreement being signed, it “will find itself increasingly isolated,” he predicted in his Monday interview. “Not necessarily because of any decisions taken at a government level but because of decisions taken by a myriad of private economic actors, be it companies, be it pension funds, be it consumers who will be choosing other product on the supermarket shelves.”

EU Ambassador to Israel Lars Faaborg-Andersen, left, with Israeli Minister Yuval Steinitz (photo credit: Yossi Zwecker)

EU Ambassador to Israel Lars Faaborg-Andersen, left, with Israeli Minister Yuval Steinitz (photo credit: Yossi Zwecker)

His remarks came after US Secretary of State John Kerry warned last weekend that the boycott would expand if talks fail.

Speaking at the Munich Security Conference on Saturday, Kerry said that Israel faces an “increasing delegitimization campaign that has been building up. People are very sensitive to it. There are talk of boycotts and other kinds of things.”

Kerry said he was utterly certain that the current status quo was “not sustainable… It’s illusionary. There’s a momentary prosperity. There’s a momentary peace.”

The warnings caused uproar in Israel, with some officials condemning the remarks while others recommended the government take note. Chief peace talks negotiator Tzipi Livni rushed to Kerry’s defense on Monday, and said the right-wing lawmakers that “would lower their eyes in embarrassment if they knew what Kerry has done to prevent these threats and these boycotts.”

Kerry’s statements were dismissed by Prime Minister Benjamin Netanyahu on Sunday, who said “immoral and unjustified” boycotts would only “push peace farther away.”

But Finance Minister Yair Lapid said Israelis had to “face the facts” and be aware that in the absence of an agreement, Israel would suffer a “huge economic blow” that would get persistently worse.

He said that while Israel would combat the economic threats against it, Washington shouldn’t be attacked for drawing attention to them.

“John Kerry is allowed to speak his mind,” Lapid said. “He deserves appreciation for investing countless hours and trips and a significant portion of his time to an attempt to facilitate an agreement between us and the Palestinians in spite of the difficulties.”