Israel's Diplomatic Woes in Europe Signal Potential Policy Shift
Israel experienced a significant diplomatic setback in Europe this week, marked by the loss of a key ally in Hungary and Italy's suspension of a crucial defense agreement. These developments could pave the way for long-delayed European Union sanctions against violent settlers in the occupied West Bank and increase pressure on the EU to reassess its relationship with Israel amid ongoing conflicts in Gaza and the wider region.
Hungary's Political Change Opens Door for Sanctions
With Viktor Orbán's removal from power in Hungary, Israel has lost its staunchest supporter within the European Union. Maya Sion-Tzidkiyahu, director of the Israel-Europe relations programme at the Mitvim thinktank, noted that Hungary's veto was the sole obstacle preventing sanctions against violent settlers. She anticipates that once the new Tisza government is established, the EU will swiftly push for these measures, which Péter Magyar is expected to support. Netanyahu's alignment with Orbán has positioned him unfavorably in the eyes of many Europeans, symbolizing a broader diplomatic rift.
EU officials plan to revive sanctions targeting a small group of extremist settlers once Hungary's new government takes office next month. Concurrently, Ireland, Spain, and Slovenia—strong advocates for the Palestinian cause—have called for a discussion on Israel's human rights obligations under its EU association agreement at an upcoming meeting of foreign ministers. In a letter to EU foreign policy chief Kaja Kallas, they described conditions in Gaza as "unbearable" and highlighted escalating violence against Palestinians in the West Bank, urging the EU to take a more active role.
Symbolic Sanctions Could Lead to Broader Actions
While sanctions on settlers are largely symbolic, targeting individuals with minimal ties to Europe, their implementation could bolster confidence for more extensive measures, such as suspending parts of the EU-Israel association agreement. The EU is Israel's primary trading partner, top travel destination, and a vital source of research funding through the Horizon programme. However, this economic influence has not translated into significant political leverage within Israel.
Martin Konečný, director of the European Middle East Project in Brussels, emphasized that discussions about leverage and pressure are resurfacing. He warned that if initial steps fail to improve the situation, pressure for further action could intensify rapidly. Last week, over 390 former EU ministers, ambassadors, and officials, including Josep Borrell and Hans Blix, urged the EU to suspend the association agreement in whole or part. A public petition supporting this demand garnered over a million signatures across all 27 member states, marking it as the fastest-growing petition of its kind.
Italy's Political Shift Adds to Israel's Challenges
Italy's decision to suspend its defense cooperation deal represents a significant political shift, potentially increasing the likelihood of EU action against Israel. Prime Minister Giorgia Meloni, previously one of Israel's closest allies in Europe, had maintained a strong personal relationship with Benjamin Netanyahu, often defying public sentiment in Italy, where pro-Palestinian protests are widespread across the political spectrum.
Lorenzo Castellani, a political historian at Rome's Luiss University, explained that foreign policy has become a central concern for Italian public opinion for the first time since World War II, due to the direct geopolitical and economic impacts of the conflict. Although the suspension of the defense memorandum is more symbolic than substantive, it serves as a clear warning to Israel, according to a European diplomat.
Broader Implications for European-Israeli Relations
Israel has historically relied on bilateral relationships to counter hostile EU policies, employing a "divide and thwart" strategy, as described by Sion-Tzidkiyahu. While allies like the Czech Republic's Andrej Babiš remain supportive, political ties with Israel are becoming increasingly costly for European leaders. Netanyahu's alliance with Donald Trump, who frequently criticizes Europe, has amplified concerns among EU citizens about double standards, particularly when comparing sanctions on Russia to those on Israel.
Pasquale Ferrara, a former senior Italian diplomat, noted that the lack of meaningful measures against Israel risks undermining the EU's international credibility and the rule of law. In Germany, public opinion has shifted against the Netanyahu administration, though the country's historical responsibility for the Holocaust means it will not lead criticism. Chancellor Friedrich Merz has avoided labeling Israel's security as a "reason of state" but maintains it as a core aspect of German foreign policy.
Israeli Public Unaware of Economic Dependence on Europe
These diplomatic shifts have received limited attention in Israel, where foreign policy discussions are dominated by conflicts with Iran and Lebanon, as well as relations with the United States. Few Israelis recognize the extent to which European ties underpin their standard of living. A Mitvim thinktank survey from August 2025 found that two-thirds of Israelis view the EU as an adversary, with only 14% considering it a friend.
Sion-Tzidkiyahu highlighted that while Israelis understand their security dependence on the US, they overlook their economic reliance on the EU, which remains Israel's largest trading bloc for both exports and imports. As Europe reevaluates its stance, Israel may face growing isolation and economic repercussions, underscoring the need for diplomatic recalibration in an increasingly complex geopolitical landscape.
