From September 1, Luxembourg will no longer approve sale of Israel Bonds, and it remains unclear if Israel will be able to continue issuing them in the EU.
According to an official statement from Luxembourg’s financial authority, which is a major EU and euro zone financial center, it will stop approving the prospectuses required by EU law to offer Israel Bonds, which are aimed primarily at Diaspora Jews and pro-Israel Jewish organizations. Israel Bonds raising in the EU represents a minority of Israeli Bonds issued, but were used to raise more than $2.5 billion in 2025, and a similar amount in 2024, according to the Ministry of Finance.
Luxembourg replaced Ireland
Luxembourg's announcement is an embarrassment for Israel, as the country was only chosen a year ago by the Ministry of Finance to replace Ireland, where sweeping criticism of Israel's policy in Gaza and the administered territories led to unprecedented pressure on the central bank to stop approving prospectuses.
As of September 1, 2026, it is unclear which of the 27 EU member countries will approve prospectuses that allow debt to be raised through these non-marketable government bonds. The Central Bank of Ireland told the country's media that it had not received a request from Israel to re-approve prospectuses, as of last week.
According to EU law, a member state of the EU is required to approve a prospectus for any issuance of non-marketable bonds by a country outside of it. Until the UK’s withdrawal from the EU in 2020, the UK was responsible for this in the Israeli context, and London was the financial center where the bonds received the required legal approval.
After Brexit, the underwriting process moved to Ireland. But following the Hamas massacres of October 7, 2023, and the war in Gaza, public opinion in Ireland - and the political system - became hostile towards Israel.
Over the past three years, successive Irish governments have called for the suspension of preferential trade relations between Israel and the EU, for sanctions on Israel, for the prosecution of senior Israeli officials on suspicion of involvement in the "genocide" in Gaza, and for the reduction of financial and trade ties between Ireland and Israel. In December 2024, Israel closed its embassy in Dublin.
Following the criticism of Israel, public pressure and media and political debate arose over Ireland's involvement in approving prospectuses for raising debt in the form of bonds, and claims that this aids the "Israeli war machine" and raises "fear of involvement in war crimes in Gaza."
Various parties demanded that the central bank stop the approvals, and Israel announced - in an attempt to preempt the blow - that it was transferring the approval of the prospectuses to Luxembourg. The decision was made in August 2025 by the then-Accountant General Yali Rothenberg. "Globes" was told at the time that this was not a crisis, and "if anything - this is an opportunity," due to Luxembourg's centrality as a global financial center in issuing bonds.
But Luxembourg was and remains one of the most critical countries of Israel in the EU. The decision to approve Israel Bonds there sparked criticism, but at the time Luxembourg’s financial authority announced that it "saw no reason" to reject the Irish-Israeli request to carry out the prospectuses for the State of Israel. However, now, a year later, and after public and political pressure on the issue, the authority has announced in recent weeks that it refuses to continue with this arrangement for another year. Luxembourg shared the Irish and Spanish position regarding the suspension of free trade agreements with Israel and is promoting maximum pressure on Israel through sanctions.
The technical reasoning
The reasoning given by the Luxembourg financial regulator was not political, but technical. It announced that, according to its interpretation of EU law, it could not grant a request to replace another country (Ireland) with the approval of the prospectuses year after year, because this would be "contrary to EU rules".
However, when the "Luxembourg Times" contacted the EU regulator (ESMA) on the matter, the regulator stated, "There is no obstacle to accepting such a request year after year".
The Luxembourg financial regulator subsequently told the newspaper that it disagreed with the position and that "such transfers are intended to be exceptional and should only be accepted in limited circumstances, in particular if the receiving national competent authority has a better understanding of the specificity of the financial product to be issued, or if the issuer already has a strong presence in the national market of the receiving national authority.
In any case, Luxembourg’s decision has been presented as final. It will only be responsible for approving prospectuses until August 31, and not one day later.
Who will help Israel?
It is unclear who will be the EU financial authority that will help Israel after this date. Will it be Ireland, which Israel left while criticizing its "anti-Israel" policy? The Irish media reports that the central bank has not received any such request from Israel, as required, by last week. Will the parties resort to legal proceedings that would oblige Luxembourg to grant the Irish-Israeli request? Or will Israel perhaps turn to a third, friendlier country, which would become the "home country" for future Israel Bonds approvals, or will it be forced to abandon the EU channel altogether.
Amnesty International has welcomed Luxembourg’s decision and called on all EU countries to join in refusing to approve prospectuses.
The Ministry of Finance says, "Debt management policy is based on a wide range of funding channels in local and international markets, in a variety of currencies and for different periods. As has been proven since the beginning of the war, the Accountant General's department is prepared and knows how to fully finance all government activities and needs, while relying on a deep and liquid local market and excellent accessibility to global markets. "The extensive debt raising of over NIS 700 billion since the outbreak of the war reflects the strong expression of confidence by investors in Israel and around the world in the stability and strength of the Israeli economy."
Published by Globes, Israel business news - en.globes.co.il - on August 24, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.