The European Commission, the EU's executive body, will pause bilateral support to Israel worth millions, President Ursula von der Leyen said on Wednesday.
In a challenge to divided European leaders, the commission is also tabling proposals to sanction extremist Israeli ministers and partially suspend trade relations with Israel.
"What is happening in Gaza is unacceptable," Ms von der Leyen said in a speech. "We cannot afford to be paralysed. This is why I will propose a package of measures to carve out a way forward."
Ms von der Leyen was speaking on the morning after the Israeli army attacked Hamas officials in Qatar. The strikes killed six people, according to Hamas, but senior leaders survived. A Qatari security official was among the dead. The Israeli move drew a rare rebuke from US President Donald Trump.
In a State of the Union speech to the European Parliament in Strasbourg, Ms von der Leyen acknowledged the difficulty in finding majorities among member states regarding decisions on sanctions and trade.
The bloc's 27 countries are deeply divided over the Israel-Palestine conflict. “I know that any action will be too much for some, too little for others. But we must all take our own responsibilities,” Ms von der Leyen said.
The Commission, however, can move forward alone without consulting states to suspend some of its financial relations with Israel. "Europe needs to do more," Ms von der Leyen said. "We will put our bilateral support to Israel on hold."
The institution later clarified that the suspension amounted to at least €32 million ($37 million). This includes €14 million in continuing institutional co-operation projects with Israel, such as technical assistance and information exchange. Also suspended are €18 million - or €6 million a year - Israel was set to receive between this year and 2027 under another pot of money meant to reinforce EU-Israel relations.
"We will further evaluate the projects funded under the regional EU-Israel co-operation facility," spokesman Guillaume Mercier said. Financial support to Israeli civil society and Yad Vashem, Israel's Holocaust memorial centre, will not be affected.
Mounting frustration
The announcement comes after mounting frustration at the EU's inability to sanction Israel over its human rights breaches in Gaza. It also led to strong criticism from Israel, which described it as "regrettable".
"The President of the Commission is mistaken in yielding to pressure from those who undermine Israel–Europe relations. This is a trend that runs counter to the interests of European states themselves," said Israel's Foreign Minister Gideon Saar.
Former EU ambassador to the Palestinian territories Sven Kuhn von Burgsdorff told The National that Ms von der Leyen had probably felt compelled to make the proposals because of pressure in the European Parliament and the European Council.
“It remains to be seen how Germany and Italy will react as they are the key ones having made it impossible so far to take decisions by qualified majority,” Mr von Burgsdorff said.
Germany and Italy have reportedly opposed an EU Commission proposal put forward in July to partially suspend Israel from Horizon Europe, a flagship European research programme. A qualified majority vote requires 55 per cent of the EU's states, representing 65 per cent of its population.
Mr von Burgsdorff has co-led a group of close to 300 former senior European officials that has campaigned for the EU to suspend relations with Israel and imposed targeted sanctions on Israel’s political and military leadership.
"Reckless military assaults of the type committed by Israel on the sovereign territory of Qatar yesterday, a key player in ceasefire talks, and lack of effective action will condemn generations of both Palestinians and Israelis to perpetual suffering and continue to destabilise the region and beyond," they said.
The July proposal was tabled by the Commission after an EU internal review found that Israel had breached a human rights clause enshrined in the EU-Israel Association Agreement.
The proposal “is stuck without a majority”, Ms von der Leyen said. “We must overcome this. We cannot afford to be paralysed. The Commission will do all that it can on its own.”
The European Commission will also set up a “Palestine donor group” next month that will be involved in Gaza's reconstruction. The EU is the Palestinian Authority's top donor.
The group will build on the momentum of the high-level conference in New York on September 22 during which France is set to recognise Palestine, alongside allies including Australia and Canada.
Ms von der Leyen repeated that she is a “long-standing friend of the people of Israel” and that the only realistic plan for peace in the region is based on two states.
Palestinian statehood is rejected by the Israeli government, which has threatened France with retaliatory measures for its lead role in recognising Palestine later this month.
Israel has been accused of genocide, including this month by the world's largest group of genocide scholars, over its nearly three-year campaign in the Palestinian enclave that has killed more than 64,600 people, according to local authorities.
The war was Israel's response to Hamas-led attacks in October 2023 that killed about 1,200 people.
“What is happening in Gaza has shaken the conscience of the world,” Ms von der Leyen said. “Man-made famine can never be a weapon of war. For the sake of the children, for the sake of humanity, this must stop.”
Too little
For some observers, her proposals come too late and signal EU double standards on Israel.
“There was no explicit reference to the fact that Israel is responsible for killings in Gaza,” said Faryda Hussein, a Dutch civil servant and former EU employee who is involved in a movement called EU Staff for Peace. “Not referencing the plausible risk of genocide [as stated by the ICJ in January last year] while not pointing out an aggressor legitimises the violence and grants impunity.”
“The entire EU-Israel Association Agreement should be suspended. Parts is not enough,” Ms Hussein said. She added that she was “shocked” that Ms von der Leyen did not mention the arrest warrant issued by the International Criminal Court for Israeli Prime Minister Benjamin Netanyahu.
Failure to agree at EU level on Israel measures pushed a number of European states to move forward alone – a step that is weaker than EU decisions but signals a sense of urgency over the Gaza war.
This summer, The Netherlands and Slovenia declared that hard-right Israeli ministers Itamar Ben-Gvir and Bezalel Smotrich were banned from their territory.
Slovenia has also said it would apply an International Court of Justice decision from July last year that banned states from trading with the occupied Palestinian territories. Ireland is set to follow suit later this year after years of discussion.
A similar decision at EU level will probably affect the Israeli economy. Europe is Israel's largest trading partner and exports to the bloc under a preferential trade agreement. A partial suspension on trade-related matters, as suggested by Ms von der Leyen, would also require a qualified majority vote.
Some countries, including the Czech Republic and Hungary, remain staunch allies of Israel and have blocked sanctions decisions on Israel, which require unanimity.
Europe's inability to take decisions collectively has been “painful” for many European citizens, Ms von der Leyen said. “They are asking how much worse things must get before there is unity of response. I understand. Because what is happening in Gaza is unacceptable.”
