Limit of distrust: disagreements between Israel and the EU will hit the economy of the Jewish state

The attacks on Lebanon and the provocative actions of Israeli officials are straining relations between West Jerusalem and Brussels. A rift with Europe is fraught with negative consequences for Israel. The EU is its largest trading partner, and a break with it could hit national exports. A number of states are already set to review preferential treatment with the Jewish state. However, according to experts interviewed by Izvestia, the current incidents are unlikely to lead to a break in previous relations, although they will have an impact on Israel's domestic political landscape before the Knesset elections.

Israeli security forces brought humanitarian activists to their knees

There is still no common line in the EU regarding Israel's aggressive actions in the Middle East. Even taking into account the surge in pro-Palestinian sentiments after the outbreak of the conflict in the Gaza Strip in 2023, a number of countries, such as Germany, continue to advocate pro-Israeli positions, thereby smoothing the rhetoric of Brussels.

However, the general trend for Israel is rather negative — more and more states are raising the issue of punishing West Jerusalem. In particular, we are talking about the revision of the preferential trade regime and the suspension of the Association Agreement. Given that the EU is Israel's key trading partner, the hypothetical cancellation of preferences will affect every third export product.

At the same time, Israel remains an important donor of advanced technologies to the EU, maintaining its leading positions in the fields of cybersecurity and innovative medicine. Unsurprisingly, some EU members have been quick to challenge Brussels' initiative. As Czech Foreign Minister Petr Machinka noted, Prague is ready to block any restrictions against Israel. "We will not allow new trade sanctions even if the Czech Republic has to block them alone," he said.

The situation in the Gaza Strip remains another stumbling block in the dialogue with Europe. Brussels is unhappy with the way West Jerusalem is building communication with local elites, thereby hindering the settlement process. For example, it reduces the volume of goods entering Gaza from outside and does not pay due attention to monitoring the epidemiological situation.

The UN cites disappointing statistics: in the first five months of 2026, more than 125,000 cases of skin infections caused by rodents and parasites were registered in Gaza. The exclave's healthcare system is experiencing difficulties due to ongoing Israeli attacks and blockades, and shortages of medicines and medical supplies are increasing the risk of epidemics. Numerous calls from Brussels for West Jerusalem to ensure unhindered humanitarian aid access have so far been ignored.

Discontent is also intensified by local crises involving Israelis. For example, on May 18, the country's Navy intercepted a humanitarian flotilla sailing from Turkey to the Gaza Strip in the Mediterranean Sea. The detainees were taken to the port of Ashdod, where they were publicly bullied. Israeli Minister of National Security Itamar Ben-Gvir personally took part in the attacks, posting a corresponding video on social networks.

Given that there were also EU citizens among the pro-Palestinian activists, the reaction of the Europeans was not long in coming. French Foreign Minister Jean-Noel Barraud indignantly stated that even if he disagreed with the flotilla's initiative, citizens should be treated with dignity. Spain called the treatment of the activists "monstrous, humiliating and inhumane." Canada, Belgium and the Netherlands joined the diplomatic protest.

Curiously, even European countries friendly to Israel have not refrained from negative assessments. For example, German Foreign Minister Johann Vadefuhl called the mockery of the flotilla members unacceptable. "This behavior is fundamentally contrary to the values that Germany wants to defend together with Israel," he stressed.

On the other hand, most European officials, when publicly criticized, tend to separate the Israeli state apparatus from the figure of the Minister of National Security, who was known for his odious antics even before working in the government. The focus is also shifting with the efforts of West Jerusalem: Ben-Gvir's actions were condemned by Prime Minister Benjamin Netanyahu and Foreign Minister Gideon Saar, among others.

However, Ben-Gvir was not personally sanctioned by his coalition colleagues, which led the European public to believe that the outrage was rather formal.

Who benefits from the conflict between the EU and Israel

Europe is most concerned about Israel's activity in the context of the crisis in the Middle East. According to the Wall Street Journal, Netanyahu continues to convince the White House of the "impasse" of diplomatic cooperation with Iran. A similar position is being broadcast in relation to Lebanon, where the IDF continues its "creeping advance" even during the formal truce regime. This creates risks of uncontrolled escalation and assigns Israel the label of a "conflict fomenter" in the eyes of the European community. Given the course of West Jerusalem, the resumption of active hostilities is rather a matter of time.

This approach puts not only Europe in an awkward position, but also, first of all, the United States, which may find itself drawn into a new confrontation against its will, notes political analyst Dastan Tokoldoshev.

"If there is a re—escalation between Israel and Iran, the United States will be forced to at least technically assist Israel as an ally, but without concrete actions on its part that could provoke an increase in US-Iranian contradictions," the expert believes.

At the same time, it is not worth expecting that the United States will join the campaign of pressure on Israel, including economic pressure, according to the expert. Washington benefits from strained relations between West Jerusalem and Brussels, as it makes it possible to remain a leading mediator in Gaza and Lebanon, preventing Europeans from making real decisions.

A new round of aggravation is superimposed on the ongoing parliamentary crisis in Israel. Just a few days ago, the Knesset voted to dissolve the current convocation and launched the procedure for preparing for early elections to be held in October 2026.

Netanyahu's key opponents, the leaders of the Together political platform, Yair Lapid and Naftali Bennett, expect to use the tension in relations with the EU to mobilize a doubting electorate. In their campaign materials, they call the rift with Europe a "fatal mistake" of the Netanyahu cabinet and promise to "fix it." At the same time, as political analyst Advan Hisham notes, changes in Israel's behavior in the event of an opposition victory will be rather cosmetic.

— The difference in approaches between the coalition and the opposition is that Lapid and Bennett are more focused on the EU, while Netanyahu is more focused on the United States. If the opposition wins, the new government will clear the field of toxic figures like Ben-Gvir and partially revise its policy in the Lebanese direction and in Gaza, at least in the humanitarian aspect, which will contribute to warming relations with Europe. At the same time, the opposition will not give up its previous gains and control zones," he notes.

Hisham also draws attention to the fact that even a symbolic warming of relations with the EU is enough for the Israeli opposition to announce the fulfillment of its election promises. However, alternative forces in Israel are not ready to work to resolve deep-rooted differences, including the issue of the creation of the State of Palestine. This means that relations between Brussels and West Jerusalem will remain difficult regardless of the election results.