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The European Commission has revealed plans to curb trade with Israel and enforce penalties on radical ministers in its administration, which — assuming approval — would represent the EU's strongest reaction to the military campaign in Gaza.

These plans, previewed by EU chief Ursula von der Leyen recently, would freeze trade-related terms of the partnership accord between the EU and Israel.

Such a move would strip products from Israel of privileged entry to European markets, with taxes levied on multibillion-euro exports — particularly farm products like date fruits and citrus fruit.

However, in spite of the forceful language, the steps appear unlikely to pass and have been rejected by Israel as "ethically and diplomatically flawed."

Approval Hurdles and Political Divisions

Trade limitations require approval by a supermajority of EU countries, while sanctions on people demand full agreement.

Because of the opposition of influential states, such as Berlin and Rome, and Ireland and Spain pushing for stricter action, adoption looks improbable.

EU top diplomat Kaja Kallas recognized the challenge in the European Council, telling reporters: "Political lines are very much in the position where they have been so far."

Kallas said the proposal also aimed at "militants from Hamas", unidentified "radical officials" in the Tel Aviv administration and "violent settlers and entities supporting the lawlessness occurring in the West Bank."

Financial Effects and Symbolic Steps

Europe is Israel's number one commercial ally, accounting for almost one-third of its trade in goods in the current year, worth €42.6bn (£35.8bn). Yet, the economic impact of ending tariff preferences would be modest. Trade commissioner Maroš Šefčovič estimated the effect at just €227m a annually.

The sole measure that takes immediate effect is the suspension of direct funding to the Israeli government. However, this too is largely gestural with a mere €9.4m out of €14 million allocated for 2020–24 — and needs no approval from member states.

Mediterranean Commissioner Dubravka Šuica stressed that financial support for initiatives tackling antisemitism and supporting civil society would not be impacted.

Tel Aviv Reaction and Next Steps

Israeli Foreign Minister Gideon Saar dismissed the Commission's plans as "morally and politically distorted", warning on social media that measures targeting Israel would harm Europe's own interests and vowing that any steps taken toward his nation would be reciprocated "similarly."

The timing remains uncertain when the proposals will be voted on by EU states.