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EU's growing resolve: Sanctions on Israel now discussed amid mounting atrocities in Gaza

Natale Labia
By Natale Labia
3 Jun 2025
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With the blocking of humanitarian aid and open calls for ethnic cleansing, Israel’s actions have become too severe to ignore, deny or justify. In recent weeks, a cascade of unusually strong statements, diplomatic rebukes and threats of sanctions has emerged from European capitals — and the momentum is growing.

The EU is losing patience with Benjamin Netanyahu’s Israel. After months of mounting atrocities in Gaza, it is finally reaching a turning point in its tolerance for the rogue Israeli state. 

Israel’s relentless military campaign, flagrant disregard for international law, and spiralling settler violence in the West Bank have triggered a political shift in Europe. What once seemed unthinkable — European sanctions on Israel — is now being openly discussed.

With the blocking of humanitarian aid and open calls for ethnic cleansing, Israel’s actions have become too severe to ignore, deny or justify. In recent weeks, a cascade of unusually strong statements, diplomatic rebukes and threats of sanctions has emerged from European capitals — and the momentum is growing.

On 20 May 2025, 17 of the EU’s 27 foreign ministers triggered a formal review of the EU-Israel Association Agreement — citing concerns over serious human rights violations. The UK has suspended trade negotiations, while Norway’s sovereign wealth fund has blacklisted two Israeli companies due to their operations in the West Bank settlements. And most crucially, last week the leaders of France, Canada and the UK jointly warned of sanctions on Israel unless humanitarian access to Gaza was urgently improved.

Perhaps most symbolically, Germany — consistently Israel’s most steadfast ally in Europe — has spoken out. The recently elected chancellor Friedrich Merz — a conservative politician and staunch supporter of Israel — publicly condemned Israeli actions in Gaza as unjustifiable. His statement marks an unprecedented step in post-war German foreign policy, which has long been anchored by its staatsraison, which sees Israel’s existence and defence as a cornerstone of the very meaning of a German democratic state.

That sanctions on Israel now would be too little, too late is hard to argue. The contrast with the swift and deeply economically damaging sanctions levied on Russia after its invasion of Ukraine in 2022 is glaring. The West’s selective application of international law has exposed deep-seated hypocrisy in its ongoing acquiescence of Israel that is rooted in geopolitical alliances, historical guilt and economic interests.

However, failure to act now would not correct past failings on this issue but rather compound them. The United Nations and countless human rights organisations have presented recurring evidence of widespread war crimes in Gaza. The International Criminal Court has issued arrest warrants for Netanyahu and his former foreign minister. At the International Court of Justice, South Africa’s case of genocide against Israel is gathering momentum. Clearly, if the EU wants to preserve its credibility as a foreign actor and defender of human rights and international law, it cannot waste any more time.

Furthermore, Israel’s expanding settlements and open declarations of “cleansing” Gaza of Palestinians are not only morally indefensible — they are a security threat to Europe and other mid-sized liberal democracies by setting an existentially dangerous precedent. If Netanyahu is allowed to get away with seizing the West Bank and Gaza, why should Putin or Trump not do the same on their flanks in Europe and Canada?

What Europe can — and must — do


The question is what it can do. First, it is obvious that if Europe opts for sanctions it will have to do so without the US. That will mean banking and financial sanctions are likely to be ineffective, as the EU cannot control the USD international financial system run out of Wall Street. Rather, the EU should immobilise any foreign exchange reserves that reside in the EU. This would impose a huge economic cost on Israel. As Martin Sandbu has shown in the Financial Times, the Bank of Israel invests about a quarter of its relatively large stock of reserves in Europe. A freeze would make this unavailable for stabilising the Israeli economy and currency, which have already been hard hit by the costs of funding the war. In time, these could also be put towards compensation due to Palestinians and the astronomical cost of clearing and rebuilding Gaza.

Second, the EU should hit Israel even harder with sanctions on trade and travel. Israel sources nearly half of its goods imports from Europe and sends more than a third of its exports to the continent. A significant share of its imports consists of fuels, which would be hard hit by restrictions on Europe’s dominance of shipping-related services. According to its statistics bureau, at least a quarter of Israel’s critical services trade is with Europe. Restrictions on business services and tourism would be highly disruptive, both economically and reputationally.

Overcoming EU gridlock


Critics of the EU would argue that discussions on sanctions towards Israel is a moot point; foreign policy, and by extension the imposition of sanctions, require EU council unanimity. There are enough stooges of Israel within the EU to sabotage any discussions, most obviously Victor Orban’s Hungary. Orban has already defied international law by welcoming Netanyahu to Budapest, despite the ICC arrest warrant.

This, however, is precisely why the EU must reform its decision-making processes. It cannot continue to allow its foreign policy to be hijacked by a single illiberal leader, as they have been with Hungary repeatedly holding up sanctions on Russia. Actions on Israel should serve as the catalyst for moving decision-making on foreign policy from unanimity to qualified majority voting.

The EU must also be prepared for retaliation from Washington. Already the US has attacked the ICC over its case against Israeli leaders. The feelings of Donald Trump towards Europe are clear, having labelled the bloc a “foe”, its leaders as “parasites”, and the whole of the EU being “formed to screw over America”. He recently threatened the bloc with 50% tariffs.

But appeasing US hostility is not a strategy, it is surrender. Taking the lead on actions against Israel would also serve to build a coalition of the willing, to which Canada, Australia and South Africa, among others, would be able to join. For countries like South Africa, stuck between China and the “West”, there are now two Wests — the liberal one in Brussels and the illiberal one in Washington.

By sanctioning Israel, Europe would send a message that no state is above the law. It would shift the dynamic of international opprobrium of Israel to materially threaten the stability and sustainability of the Israeli economic model. Following economic measures, soft power tactics — such as banning Israel from participation in international sporting and cultural events like the Olympics, international football and Eurovision — would be a possible and natural next step. 

Apartheid in South Africa was ended in no small part by the international sanctions levelled on it, and the wave of international sentiment against the country. Many have labelled the Zionist state an apartheid one. Yet its actions against the Palestinians in Gaza and its regime of terror in the West Bank make any comparison to the South African apartheid state complimentary. But the point is clear; to end these massacres and crimes against humanity, the EU, and the rest of the West which has retained its moral compass, must use more than words. 

As Theodore Roosevelt once advised, the key to diplomacy is to “speak softly and carry a big stick”. Today, the US has forfeited that role. It is the EU that must pick up the mantle, and wield its influence where it counts. Then, after taking the lead, other similarly minded nations will be able to follow. DM

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