For over a year, Israel’s Ministry of Foreign Affairs has gloried in the diplomatic ploys that up to now have averted sanctions on Israel at EU level. One time it’s the formation of a German-Italian block, another time it’s the accession to power of a pro-Israel administration in Slovenia, and yet another time it’s a public commitment by the Czech Republic to exploiting the consensus required in the EU in order to prevent anti-Israel decisions. Every time, the boast has been that Israel "succeeded in thwarting", "acted successfully", against "anti-Israel countries", and defeated the "pro-Palestinian block" in the European arena.
All that time, Israel ignored the big picture: European countries have changed direction, moved up a gear, and are prepared to impose economic sanctions on Israel in response to its policies in the territories and the Gaza Strip. The events of the past twenty-four hours demonstrate that if the EU channel is blocked, these countries have no hesitation in acting independently. The Netherlands turned against Israel more than a year ago, and since then more and more countries have joined what has become the consensus in Europe: a ban on trade with the settlements, which in practice threatens Israel’s trade with the EU, its largest trading partner, to which it exports goods worth €15 billion annually.
The penny didn’t drop in Israel when the Netherlands formulated a strict legal mechanism (which will come into force on September 22) that provides for a six-year prison sentence for anyone who knowingly buys products produced beyond the Green Line or on the Golan Heights. Israel’s symbolic response was to expel the Netherlands from the ceasefire supervisory force in the Gaza Strip and to threaten to do the same to any other country that made similar moves. The Israeli government announced the approval of construction in the E1 area between Jerusalem and Ma’aleh Adumim, which is a red rag to the Europeans, and boasted that Germany and Italy "are still on our side." In fact, the European countries simply joined the Franco-British channel for imposing economic sanctions.
The anchor for the decision by the twelve countries, eleven of them from Europe, that was announced yesterday is a ruling by the International Court of Justice (ICJ) in 2024 on the illegality of the Israeli occupation beyond the Green Line. Ireland and Spain were the pioneers in the use of these grounds for initiating national bans on products of the settlements, when it had previously been declared that the EU was the entity responsible for trade matters. The ICJ ruling changed the picture. Ireland and Spain were joined by Belgium and the Netherlands, and now several other countries have also joined: the UK, France, Canada, Sweden, Finland, Iceland, Poland, Portugal, and Denmark, so far.
Trade worth $300m in danger
The UK took the lead after the change in the government there. Andy Burnham, who replaced Keir Starmer as prime minister, faced huge pressure within his Labour Party, which saw how it was losing ground to the Green Party over the Palestinian issue, and he declared a "restart" of relations with Israel. He sought to avoid embarrassment at his first annual party conference as leader later this month. To protect the UK from a sharp US response, and find safety in numbers, the UK approached other countries to join the declaration. The ground was already prepared. They wanted sanctions imposed back when it was a Franco-Swedish initiative within the EU.
Now, trade worth $200-300 million annually (if exports from settlements beyond the Green Line amount to 2% of Israel’s total exports of goods, as estimated) is in immediate danger. Dates, wine, cosmetics, and other goods are in these countries’ sights. Up to now, almost every Medjool date sold at a high price in European supermarkets came from Israel. In a year’s time, the picture could be very different. Even more worrying is that the ban on imports will also include "components" from the settlements. It does so in the extremely severe Dutch law. Wine from a winery within Israel made from grapes from a vineyard beyond the Green Line, for example, will be barred.
The question is how strictly the countries that have declared the ban on trade with the settlements will enforce it, and to what extent pro-Palestinian organizations will exploit the legislation being formulated to create legal precedents that might start from a ban on products but could go as far as a general ban on trade with Israeli companies because they are indirectly connected to the settlements. And of course the fear is of the chilling effect that all this will have on business with Israel altogether: why would a European company want to read pages of legal opinions on trade with a country when it can simply avoid the risk and forego it?
The diplomatic downfall that took Israelis by surprise, and perhaps their government too, has actually been in the making for a long time. It was concealed from the indifferent public’s eye by all kinds of declarations of diplomatic victories, as though the Ministry of Foreign Affairs were an extension of the IDF. Now, the Israeli public has been given a glimpse into the true state of Israel’s image in Europe, and it’s frightening.
Published by Globes, Israel business news - en.globes.co.il - on September 9, 2026.
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