European High Representative of the Union for Foreign Affairs, Josep Borrell, has called for two far-right Israeli ministers to be sanctioned. EPA
European High Representative of the Union for Foreign Affairs, Josep Borrell, has called for two far-right Israeli ministers to be sanctioned. EPA
European High Representative of the Union for Foreign Affairs, Josep Borrell, has called for two far-right Israeli ministers to be sanctioned. EPA
European High Representative of the Union for Foreign Affairs, Josep Borrell, has called for two far-right Israeli ministers to be sanctioned. EPA

EU splits over pressure on Israel despite frustration with occupation


Sunniva Rose
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The EU is struggling to find ways to increase diplomatic pressure on Israel despite increasing frustration with the violence of the occupation of Palestinian territories in the West Bank and the conduct of the war in Gaza.

Only a minority of the bloc's foreign affairs ministers at a meeting on Thursday appeared to show interest in backing EU top diplomat Josep Borrell's calls to sanction two far-right Israeli ministers, Finance Minister Bezalel Smotrich and National Security Minister Itamar Ben-Gvir.

A toll of destruction and human suffering that we have not seen in the 21st century
Sigrid Kaag

Mr Borrell did not name the ministers but has previously been sharply critical of their actions.

He said he would ask foreign ministers whether they consider it appropriate to sanction "some Israeli ministers [who have] been launching hate messages, unacceptable hate message against Palestinians and proposing things that go clearly against international law and an incitation to commit war crimes."

There should be no "taboos" for the EU to use its "toolbox to make humanitarian law respected," added the Spanish diplomat.

Belgian foreign minister Hadja Lahbib said Belgium supported more sanctions against "leaders of terrorist organisations, including Hamas, and violent settlers".

Belgian Foreign Minister Hadja Lahbib, left, Spain's Minister of Foreign Affairs Jose Manuel Albares, centre, and German Foreign Minister Annalena Baerbock in Brussels.
Belgian Foreign Minister Hadja Lahbib, left, Spain's Minister of Foreign Affairs Jose Manuel Albares, centre, and German Foreign Minister Annalena Baerbock in Brussels.

Some countries, including Hungary which has routinely blocked tough measures against Israel, rejected Mr Borrell's suggestions.

Hungary's Foreign Minister Peter Szijjarto said that Budapest considered Borrell's proposal "dangerous". His Italian counterpart, Antonio Tajani, said sanctions would not be "the right path" to keep Israel at the negotiating table.

Germany's foreign minister, Annalena Baerbock, meanwhile, voiced reluctance on the proposal and recalled that EU sanctions were already in place against violent Jewish settlers.

Mr Smotrich and Mr Ben-Gvir's behaviour have triggered criticism from the Israeli defence and security apparatus.

Mr Smotrich recently appeared to suggest starving the entire Gaza Strip's population of two million people. Mr Ben-Gvir led a crowd of thousands in storming al Aqsa mosque in violation of a ban on Jewish prayer. On Tuesday, he said he would support building a synagogue at the compound, Islam's third holiest site.

Those comments earned Mr Ben-Gvir a rebuke from Defence Minister Yoav Gallant, who said on X that "challenging the status quo on the Temple Mount is a dangerous, unnecessary, and irresponsible act." Access to the site is controlled by Israel.

A third round of sanctions?

There was, however, interest in Brussels in issuing a third round of sanctions against extremist settlers who attack or harass Palestinian civilians in an effort to drive them out of territory that is meant to constitute their future state.

No announcement is expected because executive decisions cannot be taken at informal meetings of EU ministers.

Between October 2023 and August 2024, 622 Palestinians were killed in the West Bank. The Israeli army has also stepped up its raids in the area, with at least 17 dead in the past two days. In 2024, Israeli air strikes killed 136 Palestinians, compared to six between 2020 and 2023.

Mourning over the bodies of four Palestinians killed in an Israeli military operation, during their funeral in the Fara camp in the occupied West Bank.
Mourning over the bodies of four Palestinians killed in an Israeli military operation, during their funeral in the Fara camp in the occupied West Bank.

Sweden's Foreign Affairs Minister Tobias Billstrom told reporters that he wanted "to highlight the growing problem of extremist settler violence in the West Bank."

"We’d also like to talk about listing more extremist settlers of course which we are already in favour of," added Mr Billstrom.

The UN's humanitarian co-ordinator for Gaza, Sigrid Kaag, was invited to brief ministers on the situation in the embattled enclave.

In Gaza, a "humanitarian tragedy has been unfolding of unprecedented proportions, with a toll of destruction and human suffering that we have not seen in the 21st century," Ms Kaag said.

Polio has recently returned to Gaza after 11 months of a retaliatory Israeli military war that has killed more than 40,500 people. The war was launched after Hamas-led attacks against Israel killed around 1,200 people.

The first case of polio in 25 years was last week, detected in a baby, leading the UN to call for a pause in the fighting to vaccinate Gaza's 640,000 children under ten years old. In a statement, Mr Borrell requested "humanitarian pauses" for the vaccination campaigns to be successful.

"An epidemic among a population already weakened by over 10 months of fighting and displacement, malnourishment, lack of basic health services, and deplorable sanitary conditions, as well as further spread internationally, must be avoided,” said Mr Borrell.

The conflict had Israel's "war against Hamas" had become a "war against Palestinians," said Ireland's Foreign Affairs Minister Michael Martin. Ireland is one of two EU countries that recently recognised Palestinian statehood to further increase pressure on Israel.

Mr Martin said that he would reiterate Ireland's request, initially filed in February with Spain, that the EU review its trade association agreement with Israel.

The advisory opinion issued last month by the International Court of Justice deeming the Israeli occupation of Palestinian territory unlawful had "shed the light on human rights clauses of that agreement," said Mr Martin.

"It cannot be business as usual," he said. "We have within our remit a moral obligation to raise these issues and do everything we possibly can to end this war because the level of death and destruction is quite shocking."

In its opinion rendered on July 19, the court said that it was up to the UN General Assembly and Security Council to decide on how to end Israel's illegal occupation of territories annexed in the 1967 war.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Wins: 28
Wins by KO: 26
Losses: 4

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Updated: August 29, 2024, 1:19 PM