Updated October 18, 2026. Originally published October 24, 2023.
In September 2025, European Commission President Ursula von der Leyen announced plans to suspend some of Israel’s preferential trade arrangements with the EU. If Europe possessed enough economic power to put pressure on Israel, why had it struggled to influence events in Gaza?
I first examined the question in October 2023, shortly after Hamas attacked Israel and Israel began its military campaign in Gaza. Three years of war and negotiations have made the economic dimension impossible to ignore. Europe has substantial influence through trade, finance and diplomacy. Its difficulty is converting these relationships into measures that member governments will support.
Europe’s largest source of leverage is trade
According to the European Commission’s trade statistics, the EU was Israel’s largest goods-trading partner in 2025. It accounted for 31.7% of Israel’s total goods trade with the world, with bilateral trade reaching €43.3 billion.
The EU–Israel Association Agreement, in force since 2000, provides a framework for commercial cooperation and political dialogue. Article 2 makes respect for human rights and democratic principles an essential element of the agreement. This creates a basis for reviewing the relationship when serious human rights concerns arise.
On September 17, 2025, the Commission proposed suspending certain trade concessions following its assessment that Israeli government actions breached these provisions. Israel defends its military campaign as necessary for security and defeating Hamas and disputes accusations concerning its conduct. The proposal would remove preferential tariff treatment for certain goods, not impose a complete trade embargo.
The EU legislative record continued to identify the proposal as an ongoing procedure in October 2026. The distinction matters. Announcing a trade measure demonstrates political intent. Implementing it demonstrates that member governments can agree to use the powers available to them.
Why European governments struggle to act together
The EU has 27 member states with different approaches to Israel and Palestine. Germany’s response reflects historical responsibility following the Holocaust. Ireland and Spain have taken more outspoken positions against Israeli military conduct in Gaza. Other governments weigh security, commercial ties and relations with Washington differently.
The legal voting rules also vary. Traditional EU foreign-policy sanctions generally require unanimity in the Council. Suspending certain trade preferences can be approved through a qualified-majority procedure. The September 2025 trade proposal is in the latter category. Even without a formal veto, divisions can stop the required coalition from forming.
The EU’s influence over Hamas is a different question
My original article made an error that needs correcting: Hamas does not represent the Palestinian Authority. These are separate institutions. Hamas took control of Gaza in 2007 after violent conflict with Fatah. The Palestinian Authority administers parts of the occupied West Bank, subject to Israeli control and Palestinian political divisions.
The EU maintains formal relations with the Palestinian Authority, finances institutions and has sanctioned Hamas and Palestinian Islamic Jihad. Brussels cannot exercise the same diplomatic influence over Hamas that it has through recognized Palestinian institutions. Funding the Palestinian Authority does not resolve the question of who governs Gaza.
The EU therefore faces two distinct political problems: influencing Israeli policy and supporting Palestinian institutions capable of administering territory and negotiating agreements.
October 2026: European statements and the Gaza ceasefire
At its October 15–16, 2026 meeting, the European Council reaffirmed support for a two-state settlement and expressed concern about Gaza’s humanitarian conditions. Leaders called for sustained aid access and the release of Palestinian clearance revenues withheld by Israel.
The Council called for progress on implementing UN Security Council Resolution 2803, including the disarmament of Hamas and other armed groups, withdrawal of Israeli forces from Gaza and no role for Hamas in Gaza’s future governance. Its statements set out policy objectives. They do not by themselves secure compliance.
The October 2025 ceasefire did not end violence. Reports in October 2026 described further strikes and disputes over ceasefire obligations. European declarations cannot themselves open a crossing or guarantee food deliveries. Those decisions depend on the authorities controlling access, armed groups and the other parties involved in negotiating and enforcing arrangements.
I have also discussed the politics of humanitarian attention in The Politics of Selective Outrage. Public arguments about war victims do not replace mechanisms that deliver assistance.
Why Washington retains a central diplomatic role
Israel’s security relationship with the United States gives Washington forms of influence that the EU does not possess collectively. American military assistance and direct diplomatic engagement have placed the United States at the center of security negotiations. European influence is more concentrated in commerce, development funding and diplomatic support.
The distinction does not make the EU irrelevant. European support helps sustain civilian institutions and reconstruction efforts. EU missions also give it roles beyond making statements. Yet these cannot substitute for security arrangements accepted by Israel and Palestinian decision-makers.
Europe’s internal arguments are partly historical. My related article Gaza Did Not Split Western Christianity examines one part of that debate. The political positions of member governments are not interchangeable.
Can European money produce political influence?
Financial support helps sustain Palestinian public services, but a donor does not necessarily control the political conditions in which funds are spent. Israel collects clearance revenues on behalf of the Palestinian Authority under existing fiscal arrangements. Interruptions can affect salary payments and essential services.
In October 2026, the European Council called for the release of these revenues and the continuation of correspondent banking arrangements between Israeli and Palestinian banks. The banking dimension is revealing. Palestinian institutions need access to revenue and a functioning payment system, not simply pledges of international aid.
These conditions give the EU reasons to take part in negotiations. They also show the limitations of financing institutions without controlling the channels through which those institutions receive their money.
Europe’s problem is not a complete absence of power
The EU possesses measurable trade leverage, legal instruments and a long-standing financial relationship with Palestinian institutions. Yet possessing those tools does not establish that using them will alter either party’s conduct.
Restrictions could increase economic costs for Israel, but also affect European businesses and provoke political opposition. Supporters of continued engagement argue that dialogue preserves access to decision-makers and opportunities for practical cooperation. Critics argue that dialogue without credible consequences does little when governments reject European demands.
Both positions confront the same question: what can Brussels realistically achieve with the measures its member governments are willing to authorize?
Three years after I first raised the question, I frame it differently. Europe’s economic weight is easy to measure. Its influence over decisions on the ground is far harder to establish. When another European statement demands change in Gaza, I will look less closely at its language and more closely at the decisions that follow.
Further reading: How Israel’s Far-Right Government Fueled Tensions with Hamas (historical analysis); Israel Has Been Offering Peace and Two-State Solution. Why Palestinians Reject Them? (opinion and historical debate).