EU puts forward proposal to curb Israel trade, sanction of extremists over Gaza war

The European Commission proposed a much-delayed plan aimed at pressuring Israel into halting its war on the Gaza Strip on Wednesday, but it could struggle to take effect due to remaining divisions among member states.

On Wednesday, EU foreign policy chief Kaja Kallas urged the bloc’s 27 nations to adopt a proposal that will impact the European Union–Israel Association Agreement, while imposing sanctions on Israeli extremists 

Kallas urged the bloc’s member states to increase tariffs on Israeli goods and to sanction the most prominent extreme-right members of Prime Minister Benjamin Netanyahu’s cabinet: National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich – both of whom have advocated staunchly for the continuation of the Gaza war, and the expansion of illegal settlements in the West Bank.

The sanctions would essentially freeze any of their assets in the EU and ban them from travelling to the bloc.

The EU's top diplomat also proposed the imposition of sanctions on violent Israeli settlers, as well as 10 members of Hamas, who have yet to be named.

The proposal would also see a halt on EU countries offering support to Israel, with the exception of support for civil society groups and Yad Vashem, the World Holocaust Remembrance Centre.

"We are proposing these measures not to punish Israel or the Israeli people, but to really try to pressure the Israeli government to change course and to end the human suffering in Gaza," Kallas said. "The war needs to end, the suffering must stop, and all hostages must be released."

In a statement, the Commission added: "The proposals follow a review of Israel’s compliance with Article 2 of the Agreement, which found that actions taken by the Israeli government represent a breach of essential elements relating to respect for human rights and democratic principles. This entitles the EU to suspend the Agreement unilaterally".

"Specifically, this breach refers to the rapidly deteriorating humanitarian situation in Gaza following the military intervention of Israel, the blockade of humanitarian aid, the intensifying of military operations and the decision of the Israeli authorities to advance the settlement plan in the so-called E1 area of the West Bank, which further undermines the two-state solution," it added.

Ursula Von der Leyen, the president of the European Commission, who at first offered support to Israel during the onset of the war nearly two years ago, said the proposal to suspend trade and sanction Israeli extremists is a reflection of the bloc’s response to the "horrific events in Gaza and the recent developments in the West Bank".

The EU, however, has been divided over its response to Israel’s military onslaught in Gaza over the past 23 months, which has killed close to 65,000 Palestinians.

It has also faced mounting pressure from pro-Palestinian protesters across Europe over its response to the war, with demonstrations staged frequently, urging more action, rather than statements of condemnation only.

Countries such as Spain and Ireland have urged economic sanctions, severing of ties and other consequences in answer to the war, but Germany has mostly remained by Israel’s side due to its Staatsräson policy, or reason of state, in response to the events of the Holocaust.

The remaining divisions have raised questions on whether the proposal will be implemented or not. In June, however, the EU's diplomatic corps found that Israel had violated the human rights component of that agreement during its brutal military campaign in Gaza.

If enough EU nations agree, however, tariffs amounting to about 230 million euros ($166 million) will be slapped on the 15.9 billion euros of Israeli goods exported to the EU, said Maros Sefcovic, the European Commission trade representative.

The EU currently levies no tariffs on Israeli imports due to an Association Agreement.

Gideon Sa’ar, Israel’s foreign minister, slammed the European Commission’s proposal, calling it "morally and politically distorted" in a statement on X.

Sa’ar said any moves to sanction or suspend trade with Israel will "harm Europe’s own interests" and threatened that "steps against Israel will be answered accordingly".

On Tuesday, one day before the proposal was put forward, Sa’ar accused Von Der Leyen of "empowering" Hamas through her plan, which she announced last week.

(Agencies contributed to this report)