Brussels proposes sanctions against Netanyahu: more tariffs, less aid, and punishment for ministers

BrusselsThe European Union has taken a new step forward in sanctioning Benjamin Netanyahu's government. European Union Foreign Minister Kaja Kallas proposed this Wednesday sanctioning the government. partially the association agreement between the EU and Israel, cutting off funds to Tel Aviv, punishing two of the "most radical" Israeli ministers, and expanding the blacklist of violent settlers in the West Bank. On the other hand, Brussels also proposed increasing the number of personalities and entities linked to Hamas. However, all these measures will not take effect immediately, but must have the support of the member states, which remain divided over Gaza.

The partial suspension of the association agreement between the two parties means that the EU will, in practice, raise tariffs on Israeli products. According to EU sources, 37% of the European bloc's exports to Israel and 30% of imports currently benefit from this trade pact and are exempt from border taxes. Therefore, only these percentages of transactions will see their customs duties increased to the levels generally established by the World Trade Organization (WTO) among its member states.

On the European side, the European Commission assures that it will primarily affect agri-food products. The rest of the transactions between the EU and Israel—such as chemicals, machinery, and technology—will not be affected because, as the same sources explain, Israel is a "very open" economy and many of its sectors are tariff-free, even without a trade agreement, such as the one it has with Brussels.

Taking into account current trade, senior European Commission officials assure that the new tariffs will affect Israeli imports worth a total of €5.9 billion and will cost €227 million. However, as Brussels insists, the economic weight of the EU and Israel and their interdependencies are incomparable: the European bloc's trade with Israel only accounts for 0.8% of its total annual transactions, while for Israel this percentage rises to 32%. In fact, the EU is Israel's main trading partner.

The European Commission has also proposed that member states sanction two of the "most radical" ministers, Bezalel Smotrich (Finance Minister) and Itamar Ben-Gvir (Security Minister). Their money held within the EU would be frozen, and they would also be barred from making any profits; they are also prohibited from entering any EU member state. Furthermore, Brussels intends to blacklist more figures and entities linked to Hamas and more violent settlers in the West Bank, a measure it first took in April 2024. Israel was quick to react, and through Foreign Minister Gideon, the measures announced by the European Commission. "Measures against Israel will be responses accordingly, and we hope we will not have to resort to them," he said in a post on X, in which he stated that "Israel will continue to fight" against attempts by other countries to "harm it while it is immersed in an existential war." In the opinion of the Foreign Minister, the Council of Commissioners' recommendations are "distorted" both politically and morally, and harm the interests "of Europe itself."

The chances of success

The partial suspension of the association agreement must be discussed and approved by a qualified majority in the EU Council, the body that represents the member states. However, several countries are currently opposed to it, such as Germany, Italy, Austria, Bulgaria, the Czech Republic, and Hungary. In fact, in the vote on just revising the pact itself, as many as nine state governments opposed it. Thus, if the position of these states does not change, the European Commission's proposal is doomed to fail.

However, in recent months, the European Union has shifted toward more pro-Palestinian positions, and even some state governments, such as Germany, have become more critical of Netanyahu. For example, German Chancellor Friedrich Merz announced this summer that he would partially embargo arms supplies to Israel. The position of the President of the European Commission, the German conservative Ursula von der Leyen, who until now had been one of the most pro-Israel voices in the community bloc, has also changed. To everyone's surprise, she put forward this proposal for sanctions last Wednesday in the European Parliament.

The situation is different regarding sanctions against Israeli ministers, violent settlers in the West Bank, and Hamas. These restrictions must be adopted unanimously and, therefore, a single member state can veto them. However, countries like Germany and Italy, which have great influence within the EU, seem more open to applying these punishments and could drag another of Netanyahu's most pro-Israel countries, Viktor Orbán's Hungary, towards the "yes" vote.

The only measure Brussels can take without the approval of the Member States is to cut off European funds to Israel, except for those earmarked for Holocaust remembrance. Thus, Tel Aviv will not receive some €6 million from the EU that were already budgeted but not allocated, nor will it receive all the project contracts already in operation, which represent another €14 million.

In any case, the head of European diplomacy has argued that these types of sanctions are not intended in any way to "punish" Israel, but rather to increase pressure on the Israeli government and "improve the humanitarian situation in Gaza," which she described as "unacceptable." According to EU sources, if the suspension of the association agreement is ultimately approved, it would not take effect until 30 days later to allow time for negotiations with Tel Aviv, although Netanyahu has so far acted as if he couldn't bear to hear the EU's appeals.