A potential trade ban on Israeli settlements in the occupied Palestinian territories is shaping up as the next test of EU unity on Israel.
On Wednesday, the European Commission circulated an options paper setting out a full or partial trade ban on Israeli settlements, to be discussed at Monday’s meeting of foreign affairs ministers.
The ban is only one of the options on the table, alongside requiring an export licence for goods from the settlements and imposing higher tariffs to make them prohibitively expensive.
Twenty member states urged the Commission to spell out the available options for trade restrictions on the settlements — illegal under international law — at a ministerial meeting last month, a request reinforced in the conclusions of the last European Council summit.
While EU capitals are still analysing the options now formally on the table, several member states have welcomed the fact that the file is finally moving, even as they expect divisions to surface in the coming discussions.
“There is no consensus on this,” an EU diplomat told Euronews on condition of anonymity. “But we are already happy that it is there.”
Israel remains one of the bloc’s most divisive topics. France and Sweden have openly called for restricting trade with the settlements, while Germany and the Czech Republic have been more cautious, wary of alienating Israel.
According to a second diplomatic source, Italy is the country that might tip the balance towards restrictive measures. “Italy has said several times they are open to exploring potential options,” the diplomat said.
Giorgia Meloni’s centre-right government has traditionally been a strong supporter of Israel, but that position has begun to shift amid domestic pressure and a spat with National Security Minister Itamar Ben Gvir.
Italy’s Permanent Representation to the EU declined to comment, saying Rome is still analysing the document.
Legal basis question
The key question still open is the legal basis for a potential ban: whether it should rest on commercial policy, which requires only a qualified majority, or foreign policy, which requires unanimity.
The Commission has consistently maintained that it views the measure as anchored in foreign policy. However, the options paper leaves the question open, noting that the answer depends on the “centre of gravity” of the proposal, as set out in existing case law.
Asked by Euronews whether this signalled a change of position, Deputy Chief Spokesperson Olof Gill declined to confirm it.
The Council’s legal service told EU countries, in an oral opinion, that a commercial policy legal basis should be viable, depending on the details of the proposal.
The EU’s diplomatic service has also pushed for a flexible reading of the treaties to serve the bloc’s foreign policy objectives, as Israel has become a clear friction point with the Commission.
“We have transmitted the paper to our member states, as we committed to doing. It will be discussed at the FAC [Foreign Affairs Council] on Monday, and we will take stock of that discussion and then see what happens from there,” Gill said.
Proposal still far away
Some of the governments who pushed for the paper welcomed the fact that the process was finally moving, but cautioned that what is on the table are merely options, not formal proposals, which would take time to develop.
While a decision to advance a formal proposal could in theory be taken at any Council format, the issue is likely to require further discussion among foreign ministers, and the next formal FAC is not scheduled until October.
“At least the options are on the table now, but this will be yet another delay,” MEP Lucia Annunziata (Italy/S&D) told Euronews, arguing that this was another case of the Commission practising obstructionism, particularly on the legal basis issue.
Israel rejects the designation of the settlements as illegal, classifying them as “temporary sites”, and has recently introduced measures to tighten its control over the West Bank and East Jerusalem.
Israel is heading to elections in October. Several EU governments have interpreted the recent actions in the occupied Palestinian territories as part of the electoral campaign that typically precedes a vote.
“Every decision must be assessed not only on its political message, but on whether it actually improves the situation on the ground, avoids unintended consequences for civilians, and preserves the EU’s ability to play a constructive role in the region,” MEP Hildegard Bentele (Germany/EPP) told Euronews.
The Israeli government did not reply to Euronews’ request for comment by the time of publication.
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