Von der Leyen proposes suspension of EU payments and trade partnership with Israel

The EU will suspend its "bilateral support" with Israel and partially suspend the trade parts of its association agreement with Tel Aviv, Von der Leyen told MEPs during her State of the Union speech.

In an unusually tough-worded sequence, von der Leyen denounced a “man-made famine” in Gaza and “a clear attempt” by Israel to “undermine the two-state solution". But she also called Europe’s inability to find a response to Israel’s actions in Gaza “painful”.

"What is happening in Gaza is unacceptable," von der Leyen said. "Europe must lead the way just as it has done before."

The war in Gaza began after Hamas-led militants attacked southern Israel on 7 October 2023, killing around 1,200 people, many of them civilians. While Hamas is holding 50 hostages, a subsequent Israeli offensive has killed more than 64,000 Palestinians, mostly women and children, according to the Hamas-run Gaza Health Ministry whose figures do not distinguish between fighters and civilians. 

To end Europe’s paralysis on Gaza, von der Leyen proposed to “put its bilateral support to Israel on hold”, with a suspension of “all payments” to the country, except for helping the Yad Vashem’s World Holocaust Remembrance Center and other civil society projects. She also called for the partial suspension of the bloc's association agreement with Israel "on trade-related measures". 

A commission spokesperson told Euronews that the EU would put on hold future payments for several cooperation projects with Israel, including “an average of 6 million euros” per year via an EU financial instrument called “Neighbourhood, Development and International Cooperation Instrument - Global Europe (NDICI)" for the period 2021 to 2027.

In addition, the bloc will also put on hold “14 million euros” for “ongoing projects,” including institutional cooperation projects like TAIEX, which according to the commission website provides “rapid support to public administrations in EU candidate countries and beyond.” The spokesperson added that the commission would also “further evaluate” projects linked to regional cooperation with Israel. 

Earlier this year, the EU agreed to review its main partnership with Israel or the EU-Israel Association Agreement, which was signed in 1995, in response to Israel's ongoing actions in Gaza.

The EU’s top diplomat Kaja Kallas also submitted ten options for sanctioning Israel and the Commission recently proposed partially suspending Israel from the EU’s Horizon Europe research and innovation programme.

But finding consensus has so far been impossible due to the deep divisions in Europe, with many countries that are keen to preserve their relationship with Israel. Suspending the trade parts of the association agreement would require a qualified majority among the 27, but large countries like Germany or Italy are unlikely to support the move.

“I am aware it will be difficult to find majorities,” von der Leyen said. “but we must all take our own responsibility.” 

Finally, von der Leyen also pledged sanctions on Israel's "extremist ministers" and the country's "violent settlers".

Many European countries, including Sweden and The Netherlands have already sanctioned Itamar Ben-Gvir and Bezalel Smotrich, two Israeli ministers who have repeatedly incited violence against Palestinians in the occupied West Bank.

Europe has already put sanctions in place against people and entities “responsible for serious and systematic human rights abuses against Palestinians in the West Bank,” according to the Council.

But many officials and NGOs want Europe to do more, especially since Israel agreed to move on with its controversial E1 settlement project.