1. Introduction
The conflict between Israel and the Arab States was the first item on the EU’s foreign policy agenda (in the 1970s).Footnote 1 Since then, it has been central to the foreign policy of the EU.Footnote 2 This is particularly true with respect to the Israeli–Palestinian Conflict.Footnote 3 The Conflict creates considerable instability, which, in turn, produces negative spillovers for the EU in the form of insecurity, terror and regional instability.Footnote 4 Indeed, the status quo, which reflects the non-resolution of the Conflict, is not static; instead, it consolidates Israel’s de facto, incremental annexation of the Occupied Territories.Footnote 5 After all, ‘when it comes to territorial disputes, time is not on the peacemakers’ side’,Footnote 6 as reflected in the recent deadly armed conflicts in the Middle East.
The EU’s consistent position since the 1980 Venice DeclarationFootnote 7 has been that Israel’s presence in the West Bank and East Jerusalem (and the Gaza Strip until 2005) (the Territories) is subject to the laws of belligerent occupation; that any purported Israeli annexation of occupied land is illegal and null and void under public international law; that Israel’s settlements in the Territories (the settlements) are in breach of public international law and constitute an obstacle to peace; and that the two parties should settle the Conflict on the basis of international law, with particular emphasis on the right of the Palestinian people to self-determination.Footnote 8 In 1999, and against the background of an ever-increasing commitment to the advancement of the rule of international law, the EU reinforced this position by calling upon Israel and Palestine to conclude a peace agreement based on the two-state solution,Footnote 9 and since 2002 it has asserted that this solution should be premised on the 1949 Green Line.Footnote 10 The EU’s support for the two-state solution has remained intact and has withstood the Israeli–Hamas war (2023).
This commitment on the part of the EU to contribute to conflict resolution was translated into concrete, bilateral and multilateral socio-economic and political initiatives, activities and instruments, the latter manifested in the pursuit of the linkage instrument and the differentiation instrument.Footnote 11 Yet these efforts, to a large extent, have proven to be ineffective. In fact, a dissonance exists between the EU’s strong interest in the resolution of the Conflict, its firm commitment and its long-standing engagement to promote such resolution, and its actual (lack of) contribution to achieving that end.
This article will analyse the various factors that render ineffective the linkage instrument and the differentiation instrument, and consequently the EU’s attempts at conflict resolution. It will tackle this theme by drawing empirically on the EU’s experience in conflict resolution in other parts of the world. As elaborated below, effectiveness is examined in this article in terms of the EU’s goal achievement. In our context, it is thus to be measured according to the ability of the EU to cause Israel to adopt policies perceived by the EU to be essential for the resolution of the Conflict. The thesis of the article will be advanced within the overarching theoretical framework of the EU’s actorness and effectiveness – or lack thereof – in its external relations.
An extensive corpus of scholarship exists on the effectiveness of the EU in external affairs, particularly in the context of conflict resolution. The same is true with respect to scholarship addressing EU–Israel relations, in particular in the context of the Conflict.Footnote 12 The article contributes to these two bodies of research.
Its originality stems from the combination of the following four factors. Firstly, the article attempts to scrutinise the EU’s efforts, in concreto, tackling the two principal instruments employed by the EU towards Israel: namely, the linkage instrument and the differentiation instrument. Secondly, it represents the first attempt to address these two instruments from the perspective of theories pertaining to effectiveness, actorness and cohesiveness. Thirdly, the effectiveness of the EU’s intervention is examined against contemporary developments, mainly the Israel–Hamas war (2023-present). Finally, the analysis offered by the article is interdisciplinary, intersecting international law, EU law, international relations, and European integration.
The article has three limitations that should be outlined from the outset. Firstly, it analyses the EU trade instruments that are directed at Israel and premised on international law, and it does not therefore examine the effectiveness of the EU policies vis-à-vis Palestine.Footnote 13 Put differently, even if the two instruments were to have been employed in the most effective manner, that would not suffice, as the resolution of the Conflict depends also on the conduct of the Palestinians (a theme that is not addressed in this article) and on their positive/negative contribution to conflict resolution efforts.
Secondly, the article examines the lack of effectiveness of existing, concrete EU measures. It does not address the question whether the EU in principle can play a prominent and effective role in resolving the Conflict, should it adopt different policies and instruments. Put differently, the article does not engage in counter-factual analysis or predictions; it only examines policies and instruments that were actually pursued. Indeed, the very ability of the EU to serve as an effective peace-broker should not be assumed axiomatically, given its lack of hard power, the strained EU–Israeli relations, and Israel’s focus on security considerations and hard power – themes to be developed below. In fact, the article argues that the very possibility of effective EU intervention is becoming even less likely, given recent events in the Middle East.
Thirdly, the article is focused on the intervention by the EU in the Conflict. It thus represents a case study. In order to better ascertain the external validity of the article’s findings, further assessment of the EU’s effectiveness in conflict resolution is warranted with respect to other cases of conflict and occupation. More broadly, this calls for an assessment of the contemporary limits of relying on trade-related instruments grounded in international law to advance conflict resolution worldwide.
2. Theoretical framework
In its move away from a state-centric approach, literature has attempted to conceptualise and theorise the EU as a global, non-military power.Footnote 14 The pioneer work of Jonas Sjöstedt treated the EU’s capability in that respect as the ‘ability to function actively and deliberately in relation to other actors in the international system’.Footnote 15 Subsequently, scholarship has adopted various theoretical frameworks to treat the EU as a global actor, including Economic Power, Trade Power, Regulatory Power, Market Power, and Normative Power.Footnote 16
Initially, this body of research focused on the EU’s actorness,Footnote 17 defined as ‘the extent to which the Union has become an actor in global politics’,Footnote 18 and its capacity ‘to articulate and put forward, in a coherent manner, a set of material stimuli and normative demands, to reward alignment, and, possibly, to win the loyalty of elites and citizenry in “third countries”’.Footnote 19 Three components were held by Bretherton and Vogler to constitute actorness: (i) opportunity – the EU’s structural context of action, including factors in the external environment of ideas and events;Footnote 20 (ii) presence – the influence exerted by the EU beyond its borders, by virtue of its existence (e.g., the power of the Internal Market);Footnote 21 and (iii) capability – those internal aspects of the EU policy process that govern the Union's ability to capitalise on presence or respond to opportunity.Footnote 22
Gradually, scholarship shifted its attention from actorness to effectiveness, a concept that is ‘notoriously difficult to analyse and assess’.Footnote 23 It distinguishes between internal effectiveness and external effectiveness, the latter referring to the ability of the EU to reach its objectives by influencing other actors.Footnote 24 A similar framing contrasts effectiveness in representation (related to the aggregation of different demands into a unified position, or internal cohesiveness), and effectiveness in impact (i.e., goal attainment).Footnote 25 It also draws a distinction between effectiveness as the ratio between outputs accomplished and costs incurred, and effectiveness in terms of goal achievement,Footnote 26 in the words of Ginsberg, the ‘ability to affect what others do’.Footnote 27
The literature on effectiveness is closely linked to the corpus of research addressing external governance – a notion referring, according to Lavenex and Schimmelfennig, to the attempt to conceptualise aspects of the EU’s attempts to advance forms of integration into the European system of rules that remain below the threshold of membership,Footnote 28 through institutional processes of norm diffusion and policy transfer.Footnote 29
Scholarship also focuses on the notion of cohesiveness and its impact on actorness and external effectiveness.Footnote 30 Cohesiveness refers to the EU’s ability to formulate internally and represent externally a consistent position with a single voice.Footnote 31 As will be demonstrated in the particular context of the article, a correlation can be established in most instances between the degree of internal cohesiveness and external effectiveness: the more the EU is able to deliver a single message with a single voice, the more likely it is to reach its goals in the international arena.Footnote 32
This article draws on the scholarship relating to EU actorness and effectiveness (and their interface with cohesiveness) in the particular context of the Conflict. Scholarship addresses various factors that prejudice the effectiveness of the EU’s efforts to contribute to the resolution of the Conflict, including its lack of hard power,Footnote 33 its lack of internal coherence,Footnote 34 its limited legitimacy,Footnote 35 and the expectation-capacity gap from which it suffers.Footnote 36 In the light of these factors, scholars have designated EU efforts, inter alia, as a ‘megaphone policy’Footnote 37 and ‘much ado about nothing’.Footnote 38
The EU’s lack of actorness and ineffectiveness in the context of the Conflict manifests itself in two main ways. The first, which is more closely related to actorness, is the contrast between the EU’s prominence in formulating policies and declaring them, and the absence of the EU from major actual junctures of conflict resolution pertaining to the Arab–Israeli conflict, and particularly to the Conflict. The EU (then the EEC) attempted to address the Israel–Arab conflict as far back as 1973. Yet the peace negotiations between Israel and Egypt (1977–79) leading to the peace accords (1979) were mediated by the United States; the first Arab–Israeli multilateral conference, the Madrid Conference (1991), was sponsored by the US; the Oslo negotiations and the Interim Accords concluded between Israel and the Palestine Liberation Organization (PLO) were mediated first by Norwegian diplomats and then by the US (1993–95); the peace accord between Israel and Jordan (1994) was supported by the US; the two failed rounds of negotiations between Israel and Syria were first sponsored by the US (1994–99) and then by Turkey (2008), while the Abraham Accords – signed by Israel, Morocco, Sudan, Bahrain and the United Arab Emirates (2020) – were mediated by the US. The EU, to all intents and purposes, remained absent from these various rounds of negotiations and accords. More recently, the negotiations between Israel and Saudi Arabia were sponsored by the US, with no EU involvement. The same is true with respect to the return of Israeli hostages in the current Israel–Hamas conflict, sponsored mainly by Qatar, together with Egypt and the US, the indirect negotiations between Israel and Lebanon, and the ceasefire between Israel and Hamas (October 2025), all led by the US, with virtually no EU direct involvement.
The second manifestation of the EU’s ineffectiveness is the very fact that its policies, declarations and involvement in the Conflict in the form of the linkage instrument and the differentiation instrument have not contributed to the advancement of its resolution, to an agreement on core disputed issues (such as settlements, borders, refugees and the status of Jerusalem), or to the prevention of breaches of international law, in particular, the failure to prevent the incremental entrenchment of Israel’s presence in the Territories. It would thus be almost impossible to find an area in which EU policy and its efforts have had any meaningful and tangible impact on Israel’s policies or on its conduct in the Territories, and hence on the advancement of the rule of (international) law.Footnote 39
In the face of such ineffectiveness, the EU has attempted to concretise its declaratory policies and narrow the gap between its rhetoric and deeds, through the adoption vis-à-vis Israel of the linkage instrument and the differentiation instrument. The article postulates that these instruments, too, are not effective and that this contributes, in turn, to the very ineffectiveness of the EU’s overall involvement, thereby preventing the EU from meaningfully advancing resolution of the Conflict.
The article’s thesis will be examined from the perspective of external effectiveness, which denotes the degree of influence of EU measures on Israel’s policies, as opposed to internal effectiveness. It will also be advanced through the prism of its effectiveness in impact as opposed to its effectiveness in representation.
It will thus focus on effectiveness in terms of goal achievement and not in terms of the ratio between costs incurred and outputs accomplished. Thus, drawing on the work of Rhinard and Sjöstedt, the article focuses on what the EU manages to do in practice and its actual impact: ‘Has anything changed as a result? To what extent do general and specific conditions, along with contextual factors and performance, make any difference at all to the international system?’Footnote 40
3. The linkage instrument and its ineffectiveness
3.1. The linkage instrument
The linkage instrument conditions the upgrading of EU–Israel relations upon advancement towards the resolution of the Conflict, based on international law. It should be examined in the context of the scholarship on conditionality. Damro postulated that ‘the single market provides the material existence of the EU as a market power Europe that externalizes its economic and social market-related policies and regulatory measures’.Footnote 41 Indeed, the EU’s impact on third countries, or its effectiveness, stems from its ‘presence’Footnote 42 and from third countries’ dependence on the EU system of regional governance and the Internal Market.Footnote 43 The effectiveness of the Market Power EU, as well as its external governance impact, depend, in turn, on two principal mechanisms: namely, socialisation and conditionality.Footnote 44
Conditionality has been perceived as a means to achieve change in norms or in behaviour, both in international relations and in the context of EU enlargement.Footnote 45 According to Lavenex, and Schimmelfennig and Sedelmeier, the exercise of conditionality consists in the threat of sanctions or the promise of rewards in exchange for compliance with a certain demand.Footnote 46 The effectiveness of the mechanism of conditionality depends on the size of the EU’s rewards and the credibility of its conditionality.Footnote 47
When the EU adopted its neighbourhood policy (ENP) in 2004, it created a clear quid pro quo. Drawing on the enlargement policy, the ENP was premised on a strong conditionality mechanism.Footnote 48 The EU, in return for its willingness to open its economic gates, required its neighbours to adopt its basic values of democracy, rule of law, human rights and the peaceful resolution of conflicts, based on international law.Footnote 49 The launch of the revised ENP in 2011 was designed to reinforce conditionality, based on the ‘“three Ms”: more Money, more Market access and more Mobility’.Footnote 50
This approach was applied to the State of Israel. In fact, the linkage created with respect to Israel between enhanced trade and the commitment to democracy and human rights was already enshrined in the 1995 EU–Israel Association Agreement (the Enabling Clause), which stipulates that ‘[r]elations between the Parties, as well as all the provisions of the Agreement itself, shall be based on respect for human rights and democratic principles, which guides their internal and international policy and constitutes an essential element of this Agreement’.Footnote 51
In 2008, against the backdrop of peace negotiations that were taking place at that time, the EU’s Foreign Affairs Council adopted resolutions that linked any further deepening of cooperation with Israel to significant progress in bilateral Israeli–Palestinian conflict resolution efforts.Footnote 52 Thus the Commission declared that ‘[t]he process of developing closer EU–Israel partnership needs to … be seen, in the context of the broad range of our common interests and objectives, which notably include the resolution of the Israeli–Palestinian conflict through the implementation of the two-state solution’.Footnote 53 This link was subsequently reinforced by the EU Foreign Affairs Council in 2013: in exchange for a peace agreement, the EU offered the parties an upgrade in their relations to a special privileged partnership.Footnote 54 In the same vein, in a joint document of the Commission and the High Representative (2013), the EU spoke explicitly of freezing negotiations for upgrading reciprocal trade relations and of refraining from the adoption of a revised EU–Israeli Action Plan, should Israel fail to contribute positively to peace negotiations.Footnote 55
Consequently, the failure of the peace negotiations has adversely affected EU–Israel relations, leading to a near-freeze in their upgrading. The outdated 1995 Association Agreement continues to govern trade relations; the parties are not progressing towards the negotiation of a Deep and Comprehensive Free Trade Area, and the EU–Israel Association Council, the organ responsible for making strategic decisions on the development of relations at the political level, has not met for nine years.Footnote 56 The rise to power of the short-lived, more moderate government of Naftali Bennett and Yair Lapid (June 2021 to December 2022) led to the reconvening of the Association Council (October 2022) and hopes for a new era,Footnote 57 but the return to power of the extremist right-wing (sixth) government of Netanyahu (December 2022) has harmed EU–Israel relations:Footnote 58
Any significant enhancement of cooperation … would require Israel to meet the conditions arising from the EU’s linkage policy … The current state of EU–Israel trade relations does not meet their potential. Political obstacles are standing in the way of a substantial acceleration of their development.
3.2. Ineffectiveness of the linkage instrument
3.2.1. Vagueness
The linkage instrument is employed on two different fronts: in the ENP overall regional framework, and in bilateral relations with Israel. With respect to the former, the ENP was launched with a conditionality mechanism that appears to be strong and legally precise. This could have raised high expectations for Israeli reforms, based on the fact that institutionalist explanations indicate that the EU’s effectiveness increases with legalisation.Footnote 59
Yet subsequent ENP documents, including the EU–Israel Action Plan itself, were couched in much less conditional language,Footnote 60 leading Sasse to characterise the ENP as a ‘form of conditionality-lite’,Footnote 61 and Casier to conclude that the ‘link between conditions and rewards is unclear’.Footnote 62 Indeed, the language of conditionality, as well as the ENP’s benchmarks and rewards, have undergone a process of erosion.Footnote 63
The same is true for the conditionality instrument employed on the bilateral front. Thus, when in 2008 the EU’s Foreign Affairs Council declared that any deepening of cooperation with Israel would be linked to significant progress in Israeli–Palestinian negotiations, the meaning of ‘deepening’ was left undefined. Similarly, when in 2013 the Foreign Affairs Council offered Israel (and Palestine) an upgrade in their relations to a ‘special privileged partnership’, that offer was not backed by any concrete plan.
The vagueness of the positive conditionality mechanism and its linkage instrument renders that instrument less credible and less appealing from Israel’s perspective, and hence less effective. This conclusion is related to the lack of an accession horizon.
3.2.2. Lack of accession horizon
As Schimmelfennig and Scholtz have argued, the effectiveness of the EU’s pressures on third countries will increase with the size of the incentives: the promise of EU enlargement (i.e. accession) is more powerful than the promise of association, and the impact of the EU on candidates for membership is stronger than its impact on a state with no membership prospects.Footnote 64 In most instances, only the highest rewards, associated with membership, may be expected to justify the payment of substantial domestic, political costs.Footnote 65 In any event, EU rewards must not be lower than domestic adaptation costs (which are extremely high in our context); otherwise a rational third state will not adjust its policies.Footnote 66
Moreover, according to March and Olsen, actors may be influenced by the logic of appropriateness (choosing the behaviour that is appropriate according to their social roles and norms) and/or by the logic of consequences (choosing the behavioural option that maximises their utility).Footnote 67 With respect to the latter, Europeanization can, according to them, be driven by the EU through sanctions and rewards that alter the cost–benefit calculations of the target state (termed by Casier as ‘the external incentives model’Footnote 68). Drawing on the logic of consequentialism and on the external incentives model, the attractiveness of the incentive offered to the third country is of paramount importance.
The ENP was modelled on the institutional and procedural experience of the EU’s enlargement policy.Footnote 69 As such, it could also have raised expectations of an extensive transformative process. Yet, the ENP was in fact intended to serve as an accession-avoidance instrument.Footnote 70 Indeed, the linkage instrument fails to mention any possibility of Israel’s accession to the EU (this subsection is premised on the assumption that Israel may be willing to join and is capable of joining the EU, assumptions that are far from being axiomatic – see, for example, the requirement of a ‘European state’, a precondition for EU accession under Article 49 of the Treaty on European UnionFootnote 71). Since the launch of the ENP, the very possibility of Israel’s accession to the EU was never placed on the table (but nor was it ruled out, in principle).
Drawing also on the logic of consequentialism and on the external incentives model, one may conclude that Israel’s lack of an accession horizon deprives the EU of strong political leverage to overcome internal, Israeli opposition to EU–led political reforms, thereby impairing the EU’s effectiveness.Footnote 72 The EU’s ability to employ positive conditionality instruments which fall short of accession is also limited, because of the expectation-capacity gap from which it suffers.Footnote 73
The experience of offering the prospect of the ‘golden carrot’ (accession to the EU) to the separatist Northern Cyprus (in the context of the Cyprus conflict) and to Serbia (with respect to the conflict over Kosovo) teaches us that such an offer may provide the EU with much political leverage and cause the relaxation of entrenched political positions held by those who were previously considered to be pro-status quo. A credible membership perspective, such as was the case of Turkey (before 1999) with respect to Greece and Cyprus, may cause the conflicting parties to mitigate securitising moves in order not to endanger this perspective.Footnote 74
This subsection does not argue that the prospect of EU membership on the horizon would ensure a more effective contribution on the part of the EU, especially given the political composition of the current Israeli government, which pursues nationalist, populist, anti-multilateralism and anti-EU policies. It argues only that that incentive was never tried and that, without it, it is unlikely that the (positive conditionality) linkage instrument could prove to be effective, even with respect to more moderate governments that may govern the State of Israel in the future.
3.2.3. Decline of EU prominence and a richer choice of alternatives for Israel
Power-based explanations suggest that external governance is determined by the EU’s power and by the degree of dependence of the non-EU state on the Internal Market, as well as by competing ‘governance providers’.Footnote 75 Yet, changes in the international arena erode the importance of the EU in trade terms. Trade statistics indicate that because of various factors, including the economic rise of India and China, the EU is a less prominent global trade power.Footnote 76 As a result of these developments and others to be examined below, the dependence of Israel on trade with the EU has been declining.Footnote 77 According to power-based explanations, this development – which is only expected to continue – weakens the effectiveness of the linkage instrument as a promoter of political reform.
This trend and its negative repercussions are closely connected with Israel’s economic transformation from a developing country to a developed country with a stable and advanced economy. In 2025, Israel was the number 28 economy in the world in terms of GDP, the number 52 economy in total exports, and the number 25 economy in terms of GDP per capita.Footnote 78 Israel has thus become a high-income, technologically advanced economy with Western GDP per capita, rendering it less vulnerable to external economic pressures.
Israel’s successful trade diversification policies should also be considered in this respect.Footnote 79 In the last 20 years Israel has succeeded in developing ever-stronger trade relations with China, Russia, India, Mexico, and with countries in South America, while the Abraham Accords have increased the trade volume with the Gulf countries. In addition, and as Magen postulates, since Israel’s accession to the Organisation for Economic Co-operation and Development (OECD), it has redirected its bureaucratic attention towards a new aspiration group, and this has mitigated domestic pressure to associate more closely with the EU.Footnote 80 This trend, together with Brexit, only further weakens the importance of the Internal Market for Israel, thereby reducing the potential impact of any positive conditionality employed by the EU. After all, an EU external mediator which has to compete with other such external forces is likely to be less effective than a ‘monopolist’ EU external mediator.Footnote 81
3.2.4. Lack of negative conditionality measures
The linkage instrument is further weakened by its one-dimensional nature: it includes only a (vague) positive mechanism, and it lacks any mechanism of negative conditionality to be employed by the EU in the face of breaches of international law by Israel and of its lack of determination to advance resolution of the Conflict.
The long-standing practice of establishing settlements in the Occupied Territories has been supported, in varying degrees, by all Israeli governments since 1967. The current government is controlled to a large degree by the settlement movement, and its political survival depends on it.
It has been the EU position that ‘ending the conflict was a European interest’Footnote 82 and that the settlements constitute a serious obstacle to the resolution of the Conflict: ‘The position of the EU is very clear: settlements are illegal under international law, constitute an obstacle to peace and threaten to make a two-state solution impossible’.Footnote 83 Thus, from an EU perspective, Israel knowingly and systematically harms the EU’s interests. If that is the case, why does the EU not exact a price from Israel? After all, such measures would hardly be unprecedented in the Israeli context. When, in the early 1990s, Israel was facing an enormous wave of immigrants from the collapsing Soviet Union and it had a resultant dire need for loans to be able to absorb them, the administration of US President George H.W. Bush withheld financial guarantees that Israel was seeking in order to obtain the loans, because of Israel’s refusal to freeze its settlement policy. That decision addressed the roots of the settlement policies rather than their symptoms, exacting a price from the principal of the settlement policies, the State of Israel.
Yet the EU has proven itself unwilling and unable to employ a mechanism of negative conditionality towards Israel and to impose concrete, formal sanctions (as opposed to sanctioning without sanctioning – namely, refusing to revise the current trade relations and to confer additional trade benefits on IsraelFootnote 84). This is as a result of the EU’s overall weakness in employing negative conditionality, and for reasons particularly relevant to Israel (such as the Holocaust, Israeli–German special relations, US support for Israel).Footnote 85 Consequently, the EU has failed to fulfil its commitment in the context of Israel: ‘The Union has never seriously contemplated the use of ex post conditionality, i.e. that of suspending the association agreement by referring to the breach of the human rights article’.Footnote 86 In fact, the EU may be seen as moving in precisely the opposite direction: it has exempted Israeli public authorities at the national level (government agencies or authorities) from the applicability of the 2013 Financial Guidelines, outlined above, and has concluded with Israel three trade-related agreements: the Open Skies Agreement, the Agreement on Conformity Assessment and Acceptance of Industrial Products, and the Horizon 2020 Agreement.Footnote 87 Thus, despite the fact that, according to the EU itself, Israel’s policies and practices harm the EU’s strategic interests, the EU continues to confer the benefits of trade-related agreements upon it.
Difficulties encountered by the EU in the context of the Conflict are only reinforced by the leadership of Israel’s Prime Minister Netanyahu. As analysed elsewhere, Netanyahu succeeded in his use of divide-and-erode tactics by circumventing Brussels and turning to some of the Eurosceptic EU Member States that did not adhere strictly to the EU’s official line, and which displayed a normative and socio-political affinity with IsraelFootnote 88 – in particular, Hungary, Poland, and the Czech Republic. Netanyahu took advantage of the attempts by these Member States to pursue identity politics in the foreign relations arena and to horizontalize EU foreign policy, in his attempt to erode EU support for the two-state solution and to mitigate the practical implications of its implementation.Footnote 89 By forging strong political links with these Member States, Israel has succeeded in preventing the EU from speaking in a single, assertive and critical voice, and from translating its critical stance into practical measures aimed directly at Israel.
This development reflects the EU’s internal ineffectiveness, whereas this article is focused on external ineffectiveness; yet the two dimensions are intertwined, as internal cohesiveness and external effectiveness are. Indeed, the success of this policy on the part of the Israeli government should be examined in the context of the theoretical framework of this article, which (as indicated above) links cohesiveness with effectiveness. According to Delreux, the autonomy criterion of the EU’s actorness refers to the room for manoeuvre enjoyed by the actor representing the EU in international negotiations vis-à-vis the Member States, while intergovernmentalism treats EU foreign policy as reflecting Member States’ preferences rather than EU actorness. Indeed, drawing on the work of Bretherton and Vogler, a significant variety of preferences across the Member States might weaken the EU’s capability. This is likely to translate into medium or low actorness, undermining the benefit provided by strong opportunity and presence.Footnote 90
The theoretical work outlined above regarding EU actorness and external effectiveness teaches us that differentiated regional cooperation that deviates from common European values and identity has undermined common EU positions and the effectiveness of EU external action.Footnote 91 This is particularly true in our context. Consequently, if the EU was once criticised for the gap between its rhetoric and deeds,Footnote 92 it can now be criticised for its inability to rely on rhetoric only,Footnote 93 which Asseburg termed the EU’s ‘political paralysis’.Footnote 94 Israel’s attempt to resist EU pressure in favour of the two-state solution has proven to be successful, and the EU has failed to attain an effective status as an Internal Market Power or Normative Power in the context of the Conflict.Footnote 95
The conclusion of this subsection, and of the entire article, is that since its inception the EU has proven its unwillingness and inability to employ measures of negative conditionality. This conclusion, however, should be revisited in the light of recent developments pertaining to the Israel–Hamas war (2023-present) and to other contemporary conflicts that have taken place in the region.
3.2.5. Recent conflicts in the Middle East
The manner in which Israel conducted its war against Hamas, the very high death toll of Palestinian civilians, and the large-scale destruction of Gaza led to fierce criticism of the Israeli government in Europe and elsewhere. These developments prompted the United Kingdom, for instance, to halt negotiations with Israel on a prospective free trade agreement and to impose sanctions on settlers in the West Bank. This move was explained by the British Foreign Secretary, David Lammy, in the following bold terms: ‘History will judge them. Blocking aid, expanding the war and dismissing the concerns of their friends and partners is indefensible and it must stop’.Footnote 96 Will the EU follow suit?
On the diplomatic front, the EU has not remained aloof to these developments. On 20 May 2025, the EU Foreign Affairs Council adopted a proposal, initiated by the Dutch government and backed by another 16 Member States, to review its overall relations with Israel under the 1995 Association Agreement, based on the Enabling Clause, in the light of alleged Israeli breaches of human rights and of democratic principles in the Territories and in the war in Gaza.Footnote 97
In June 2025, the European External Action Service, which was entrusted with preparing the document on which the EU would base its decision in that regard, expressed strong criticism of Israel. Drawing on the reports of the International Court of Justice (ICJ) and United Nations bodies (especially the Office of the UN High Commissioner for Human Rights), it concluded that ‘[o]n the basis of the assessments made by the independent international institutions … there are indications that Israel would be in breach of its human rights obligations under Article 2 of the EU-Israel Association Agreement’.Footnote 98
If the Review procedure were indeed to lead to the suspension of the Association Agreement, or major parts of it (or if it does eventually do so), the article’s conclusion regarding the inability and unwillingness of the EU to adopt instruments of negative conditionality will be undermined, and its broader conclusion regarding the lack of the EU’s effectiveness will have to be revisited. The very decision to initiate the Review of the Association Agreement under the Enabling Clause is a surprising turn of events, which might signal an attempt on the part of the EU to adopt a more assertive stance; but will it, in fact, signal a more assertive stance on the part of the EU itself?
It is difficult to predict the final outcome of the Review procedure, yet one may speculate that it is very unlikely that it will lead to the suspension of the Association Agreement, or to the adoption of concrete sanctions. This prediction is based on the requirement to secure the support of all Member States for such a measure, an improbable requirement in the light of the position of various Member States (such as Germany, Italy and Hungary).
Indeed, the EU’s actual record since the initiative of the Review procedure supports that prediction. The words of High Representative (HR) Kallas, expressed at the Plenary Session of the European Parliament, constitute severe criticism of Israel, but also reveal her frustration with the EU’s difficulties in translating this criticism into a common position that will be backed by concrete measures against Israel.Footnote 99
With regard to the war in Gaza that commenced after 7 October 2023, Kallas directed the following harsh words at Israel (18 June 2025):Footnote 100
Reports … that Israeli forces killed over 50 Palestinian people waiting for flour at a Gaza aid site are beyond shocking. Every day this war continues, humanity slips further away. Enough is enough. A month ago, Israel also began an offensive in Gaza. ‘Operation Gideon’s Chariots’ has involved a disproportionate use of force, the continued targeting of civilian infrastructure, and an unacceptable death toll.
With respect to the West Bank, Kallas added:Footnote 101
Intimidation campaigns, physical and verbal attacks, and the destruction and burning of property and homes are leading to the displacement of entire Palestinian communities. This is outright lawlessness. Israel must come face to face with its own extremists, and what is happening in the West Bank threatens the formation of a Palestinian state and peace for the region in the long run.
Yet, when it came to concrete sanctions based on the Review, Kallas expressed her frustration with the EU’s inability to formulate a common position that would be backed by concrete measures against Israel.Footnote 102 With respect to sanctions on settlers, she stated: ‘Discussions are ongoing on further sanctions against extremist settlers, and against entities and organisations which support them, and against Hamas supporters. But we don’t have unity yet and this is something we should all push for’. She reiterated and underscored the political difficulties in adopting sanctions:Footnote 103
If it were up to me … I would take these decisions, but it’s not. I’m representing 27 Member States, and that is the frustration that I have … Sanctions need unanimity …, of course, there are violations of international law … And when it comes to the parallels with Ukraine, the difference is that there we have 27 Member States all agreeing, and that’s why we can’t do these things. But sanctions need unanimity, they need everybody on board, and we don’t have 27 Member States on board and that’s the reality.
The prediction that the EU will not be able to translate its criticism into concrete measures is further supported by the actual outcome of the first meeting of the Foreign Affairs Council considering the Review (23 June 2025). The refusal of numerous Member States to support the suspension of the Association Agreement or parts of it forced HR Kallas to convene a second meeting (July 2025) and to conclude that the next step would be to engage in direct, critical discussions with the Israeli government, not with a view to punishing Israel but rather to causing it to improve its compliance with international law and human rightsFootnote 104 – critical engagement, but not sanctions. Once again, lack of internal cohesiveness resulted in lack of external effectiveness.
An important yet less dramatic consequence of that Review (which I consider to be counterproductive and discriminatory) may be the suspension of Israel’s participation in the EU’s research and innovation framework, Horizon – a move which might carry a heavy, strategic price for Israel’s academy and industry, but which might enhance the EU’s actorness and effectiveness.Footnote 105 Yet this decision and this outcome require a qualified majority, which is not likely to be secured, given the position of Member States such as Germany and Italy on this issue.
Indeed, the Commission’s proposal (28 July 2025) for the partial suspension of Israeli tech companies in activities funded under the Accelerator of the European Innovation Council (EIC), in the framework of the Horizon Agreement with Israel, failed.Footnote 106 The proposal was made ‘on account of a material breach by Israel of Article 2 of the Euro-Mediterranean Agreement, and as a matter of special urgency, with immediate effect, given the risk of a severe further deterioration of the humanitarian situation on the ground’. Yet, once again, the meeting of the Council (29 July 2025) was concluded with no concrete decisions, in the face of a lack of support from Germany and Italy.
Yet another more modest move on the part of the EU would have been the adoption of sanctions against radical right-wing ministers in the Israeli government. The EU attempted to act in this manner (August 2024), but that attempt failed because of the opposition of numerous Member States.Footnote 107 This neglect should be contrasted with the joint decision of Australia, Canada, New Zealand, Norway and the United Kingdom, which in June 2025 announced the joint adoption of sanctions and other measures targeting two Israeli senior ministers, Itamar Ben-Gvir and Bezalel Smotrich, for inciting violence against Palestinians in the West Bank.Footnote 108
The US-brokered ceasefire between Israel and Hamas (October 2025) will probably only reduce the likelihood of EU concrete actions. Indeed, the Foreign Ministers of the 27 EU Member States decided (on 20 October 2025), under the aegis of the EU Foreign Affairs Council, not to proceed with the Commission’s proposal to impose economic and political sanctions on Israel, given the ‘fragility’ of the situation on the ground. It was decided, however, to ‘keep the proposals on the table’.Footnote 109
In conclusion, the EU’s overall inability to employ measures of negative conditionality vis-à-vis Israel, which is in itself a manifestation of the EU’s ineffectiveness in the context of the Conflict, only contributes to the ineffectiveness of the linkage instrument. This conclusion remains intact, even in the face of the deadly war between Israel and Hamas.
4. The differentiation instrument and its ineffectiveness
4.1. The differentiation instrument
Since 1998, the EU has attempted to concretise its conflict resolution efforts through its trade-related agreements with Israel. Based on its reading of international law – in particular, the Palestinians’ right to self-determination and Israel’s recognised borders – it has granted benefits under these agreements to entities situated within the recognised borders of the State of Israel, while withholding the benefits of EU–Israeli cooperation from companies and research institutions based in the Territories or operating therein, and from products produced therein.Footnote 110
Firstly, the Commission refused to allow products produced in the settlements and exported to the EU to be classified as Israeli products under the EU–Israel Association Agreement, thereby denying them a privileged status.Footnote 111 (This stance was confirmed by the European Court of Justice in the Brita verdict of 2010.)Footnote 112 Subsequently, the Council of the EU decided, in 2012, that the EU is committed ‘to ensure that … all agreements between the State of Israel … must unequivocally and explicitly indicate their inapplicability to the territories occupied by Israel in 1967’.Footnote 113
The Commission reinforced this position by publishing Guidelines addressing the grant of EU financial support to Israeli entities or to their activities in the Territories (2013),Footnote 114 according to which only Israeli entities having their place of establishment within Israel’s pre-1967 borders will be considered eligible for EU grants, prizes and financial instruments, and only with respect to their activities pursued west of the 1949 Green Line.Footnote 115 In November 2013, the EU applied the Guidelines in the context of an agreement allowing Israel’s participation in the EU framework for research and innovation (‘Horizon 2020’).Footnote 116 Since 2013, the EU has adhered to that approach in all its engagements with Israel (and thus, in May 2023, it issued recommendations that importers should be required to provide additional labels of origin for products in electronic customs declarations).Footnote 117
In 2015, the Commission published the ‘Interpretative Notice on Indication of Origin of Goods from the Territories Occupied by Israel since June 1967’, in an attempt to rely on labelling requirements in order to prevent EU consumers from being misled into believing that these are Israeli products.Footnote 118 These labelling requirements were subsequently confirmed by the Court of Justice of the European Union in its Psagot judgment (2019).Footnote 119
According to the EU, the differentiation instrument may assist it in advancing the resolution of the Conflict, based on international law, and on achieving a concrete two-state solution. In that respect, the differentiation instrument is premised on and reinforces the almost universal consensus that Israel is an Occupying Power in the Territories and that its borders should be delineated by the 1949 Green Line, subject to any adjustment that may be agreed by Israel and Palestine (this approach was embraced by the ICJ in two advisory opinions of 2004 and 2024).Footnote 120
Indeed, at the multilateral level, the EU and its Member States contributed in this respect to the adoption of UN Security Council Resolution 2334, which aligns with the EU differentiation instrument, by calling for the distinction between the State of Israel and the Occupied Territories,Footnote 121 reaffirming ‘its determination to examine practical ways and means to secure the full implementation of its relevant resolutions’.Footnote 122 The EU approach was also manifested in the 2024 advisory opinion of the ICJ regarding the legality of Israel’s occupation, in which the (majority of the) Court concluded:Footnote 123
Member States are under an obligation not to recognize any changes in the physical character or demographic composition, institutional structure or status of the territory occupied by Israel on 5 June 1967, including East Jerusalem, except as agreed by the parties through negotiations, and to distinguish in their dealings with Israel between the territory of the State of Israel and the Palestinian territory occupied since 1967. The Court considers that, in its dealings with Israel, the duty of distinguishing between its own territory and the Occupied Palestinian Territory encompasses, inter alia, the obligation to abstain from treaty relations with Israel in all cases in which it purports to act on behalf of the Occupied Palestinian Territory or a part thereof on matters concerning the Occupied Palestinian Territory or a part of its territory; to abstain from entering into economic or trade dealings with Israel concerning the Occupied Palestinian Territory or parts thereof which may entrench its unlawful presence in the territory; to abstain, in the establishment and maintenance of diplomatic missions in Israel, from any recognition of its illegal presence in the Occupied Palestinian Territory; and to take steps to prevent trade or investment relations that assist in the maintenance of the illegal situation created by Israel in the Occupied Palestinian Territory.
The differentiation instrument is intended to assist the EU in reinforcing its identity, by facilitating its international actorness and normative assertiveness. After all, the EU’s Normative Power rests, partially, on external legitimacy, which may be achieved through respect for international law and engagement in conflict resolution, based on international law. Since the early 1990s, the EU has been striving to export its successful model of peace and democratisation through trade to other parts of the world,Footnote 124 thereby extending its sphere of economic and normative influenceFootnote 125 and increasing the geographical scope of its ‘peace community’.Footnote 126 The EU has attempted in that manner to establish itself as a normative, civilian and ethical power, operating on the basis of a cohesive European identity.
This framing of EU policies may be viewed in a wider context – namely, the EU’s commitment to addressing international conflicts through international institutions and multilateralism, and to advancing the resolution of such conflicts on the basis of international law. The EU adamantly portrays its Middle East policies as consistent with international law, including the laws of belligerent occupation and international human rights law. In the words of (former) EU High Representative Ashton: ‘The region needs peace. Peace based on international law’.Footnote 127
The EU’s differentiation instrument and the non-recognition of the territorial applicability of EU–Israeli agreements to the Territories are intertwined with its ‘unshakable commitment’ to the ‘individual and collective rights of the Palestinians’.Footnote 128 In fact, the EU may justifiably be considered the Western entity that contributed most to the transformation of the concept of a two-state solution from a heretical idea in Israel and the West (1970s) to the accepted goal of the international community by 2000. (This conclusion does not contradict this article’s thesis, as it is focused not on the ability of the EU to change policies of third countries and organisations but rather on its ability to change Israel’s policies).Footnote 129
The EU’s commitment to advancing conflict resolution based on the rule of international law was reinforced by the Lisbon Treaty, which underscores that in its relations with the wider world, the Union undertakes to ‘uphold and promote its fundamental values’:Footnote 130
It shall contribute to peace, security … and mutual respect among peoples … the protection of human rights … as well as to the strict observance and the development of international law, including respect for the principles of the United Nations Charter’. Footnote 131
Thus, according to Bartels, the obligation to act consistently with international law applies to EU external policies, to the external aspects of the EU’s internal policies, as well as to trade policies which may carry negative implications for individuals in non-EU countries.Footnote 132 Hence, the EU and its Member States (when acting within the scope of EU law) are bound to refrain from any acts that adversely affect the human rights of persons in third countries and are also under an obligation to promote the protection of human rights.Footnote 133 Indeed, according to the Court of Justice of the EU, ‘the European Union is to contribute to the strict observance and the development of international law. Consequently, when it adopts an act, it is bound to observe international law in its entirety, including customary international law, which is binding upon the institutions of the European Union’.Footnote 134
4.2. Ineffectiveness of the differentiation instrument
The EU’s effectiveness is influenced by the domestic structures of third countries and by its veto players.Footnote 135 Hence, treatment by the EU of the settlers is relevant to this analysis of the effectiveness of the differentiation instrument. The State of Israel may be regarded as the principal promoter and facilitator of the settlement policies in the Territories. Admittedly, over the course of the years – and with the settlers’ enhanced political representation and prominence, which has reached its peak under the current Israeli government – the settlers have too often been the tail that wags the dog. However, for the purposes of international law, the EU may and should legitimately regard the State of Israel and successive Israeli governments, which have facilitated and underwritten the settlement movement and pulled the financial strings, as the principal promoter of settlement in the Territories.
This proposition is reflected in the ICJ’s advisory opinions of 2004 and 2024, in which the Court placed emphasis on Israeli government practices that ‘organize or encourage’ settlement activities,Footnote 136 and in which it focused almost exclusively on the activities of the state, not on those of the settlers.Footnote 137 As acknowledged by both the ICJ and the Israeli Supreme Court,Footnote 138 in the vast majority of cases the settlers settled in the Territories with the active support, encouragement and facilitation of the Israeli political establishment and the security forces. Indeed, the 2024 advisory opinion, regarding the legality of the occupation of the Occupied Territories, focuses, first and foremost, on Israel’s conduct and on the question whether Israel’s policies amount to de facto annexation.Footnote 139 Various corporations assist and facilitate the settlement policies of the State of Israel, whereas the settlers provide ‘the boots on the (occupied) ground’. Hence, they serve as secondary actors in the implementation of Israel’s settlement policies.Footnote 140
The differentiation instrument is inconsistent with this focus by international law on the responsible state for its policies and for the actions of those operating on its behalf. From a legal perspective, an instrument that focuses on the secondary entities of the Territories’ policies rather than on their principal promoter, the state, does not accord with the letter and spirit of public international law. It is also not in line with the EU’s self-declared objective, which ‘is to make a distinction between the State of Israel and the Occupied Territories when it comes to EU support’.Footnote 141
This verity is particularly applicable to the laws of belligerent occupation. Thus, Article 49 of the Fourth Geneva Convention lays down that ‘[t]he Occupying Power shall not deport or transfer parts of its own civilian population into the territory it occupies’.Footnote 142 The conventional interpretation of this provision is that it is the state that is responsible, under the laws of belligerent occupation, for the establishment of settlements in occupied territories, not the settlers or corporations that operate in the Territories.Footnote 143 Thus, it is the State of Israel that is the entity primarily responsible under public international law for any of Israel’s illegal activities in the Territories.
Similarly, it is the official Israeli settlement policy that has been traditionally treated by the United Nations, the United States and the EU as a serious obstacle to the ability of the Palestinians to exercise their right of self-determination and to the ability of both parties to resolve the conflict. Thus, in the above-mentioned Security Council Resolution of December, 2016, the Council reaffirmed that:Footnote 144
the establishment by Israel of settlements in the Palestinian territory occupied since 1967, including East Jerusalem, has no legal validity and constitutes a flagrant violation under international law and a major obstacle to the achievement of the two-state solution and a just, lasting and comprehensive peace.
This article does not argue that corporations may not bear any legal responsibility for the socio-political condition of the Palestinians or for their inability to exercise their right of self-determination. All that it does is to advance the argument that the oversimplified, dichotomous European narrative, in which the Green Line delineates the boundary between legality and illegality, fails to take cognisance of the simple and known fact that it is the Israeli legislator, executive and judiciary (all situated west of the 1949 Green Line) which have purposefully, systematically and successfully acted to blur the 1949 Green Line and that, as the ICJ acknowledged in its advisory opinions of 2004 and 2024, this policy has been pursued for decades.
This legally based critique is intertwined with an effectiveness-based critique, which lies at the heart of this article. The EU’s traditional policy instruments towards Israel (diplomacy, persuasion, declarations, and conclusion of trade agreements) have not proven to be effective in implementing the two-state solution. The differentiation instrument was intended to ameliorate this state of affairs by exerting pressure on Israel to adopt a more favourable position towards territorial comprom-ises’. It is postulated, however, that by failing to address the roots of the settlement policies (namely, the policies of the state, and choosing instead to exact from the settlers and from corporations active in the Territories the price of such settlement policies), the differentiation instrument has proven to be not much more than symbolic, largely devoid of any transformative impact.Footnote 145
This argument finds strong support in qualitative and quantitative research. This lack of effectiveness is to be attributed to the political strength and determination of the settlement movement and the entrenched, vested economic interests of corporations operating in the Occupied Territories. Drawing on the work of Lavenex and Schimmelfennig in the realm of (accession) Europeanisation, one may assume that the effectiveness of EU external governance may be prejudiced when that governance is faced with a large number of cohesive and effective domestic veto players,Footnote 146 particularly when such players perceive the EU agenda as encroaching upon their particular socio-political interests. Domestic veto players who benefit from the status quo and who perceive EU external pressures as illegitimate and contrary to their entrenched interests, may use their internal political force to prevent the adoption and implementation of such reforms. The settlers may be considered such veto players in the context of the EU’s attempts to promote the two-state solution, forming a cohesive, well-organised and highly influential group. The settlement movement is willing to pay a heavy price for the realisation of their religious-nationalistic beliefs. In this context, the price that the EU attempts to exact from them in the form of withdrawal of preferential trade-related benefits amounts in their eyes to a de minimis price, one worth paying, especially when they are justifiably confident that the state will indemnify them for any such loss.
That financial price is also on a minimal scale from a national perspective, amounting, in the words of Pardo and Touval, to ‘economic irrelevance’.Footnote 147 This irrelevance prevents the EU from exerting pressure on the State of Israel to change its policies towards the Territories. Indeed, research produced by the Research and Information Centre of the Israeli Parliament established that the EU’s withdrawal of trade privileges from products produced in the Territories’ is of ‘de minimis’ importance.Footnote 148 This empirical economic analysis concludes that the EU’s withdrawal of trade privileges from products produced in the Territories (coupled with the private-led Boycott, Divestment, Sanctions (BDS) European campaign), has not harmed Israel’s macro-economic performance in any significant manner.Footnote 149
The article’s conclusion is that the focus of the differentiation instrument on the settlers and corporations situated in the Territories is misplaced in terms of legality and the rule of (international) law, and that directing negative conditionality instruments almost exclusively towards private entities will not enable the EU to serve as a transformative entity. This conclusion is supported by the analysis of Oded Eran (former Israeli Ambassador to Brussels) and Lauren Klein, who contend that the application by the EU of customs duties on Territories’ products is of a de minimis economic nature, the EU’s policies amount to no more than a ‘nuisance’, and hence they are highly unlikely to change Israel’s policies regarding the Territories.Footnote 150 The work of Grossman, Manekin and Margalit corroborates this conclusion by establishing that the 2015 EU requirements for labelling settlement products (and other possible EU measures that may wrongly be perceived in Israel as economic sanctions) produced a backlash, increasing support for hard-line policies and raising hostility towards Europe.Footnote 151
The modest economic price in objective terms should also be examined subjectively. As mentioned above and below, the State of Israel, its governments and society ascribe much importance to high politics and to security considerations, which in nearly all cases enjoy priority over economic considerations and those pertaining to international legitimacy.Footnote 152
The conclusion of this article regarding the ineffectiveness of the differentiation instrument is also supported by Israel’s practice since its adoption. High-ranking members of the Israeli government have reacted vociferously to that instrument, reiterating that it will not change Israel’s perceptions or policies.Footnote 153 Indeed, such statements were supported by concrete policies, such as the establishment of settlements, which was not halted even after the adoption of the differentiation policy, but has in fact accelerated and broadened.
Ineffectiveness is also manifested in the lack of global impact of the EU policy on differentiation. Persson has rightly argued that the effectiveness of this instrument will be manifested by its ability to serve as an example ‘that others will follow’.Footnote 154 Yet no other major Western Israeli trading partners have adopted a position similar to that of the EU. They all refrain from interpreting their trade and trade-related agreements with Israel as not applying to the Territories, and none of them insists on the inclusion of a clause that would prevent extraterritorial applicability of these agreements.Footnote 155 It is thus difficult to argue that that instrument manifests the EU’s ever-growing concrete effectiveness when no other state follows suit.
Exercising power over opinion (that is, Normative Power) is a manifestation of robust soft power and, when no other major trading partner follows the path of the EU, it is difficult to maintain that the EU possesses such power and effectiveness in our context. Admittedly, the EU approach did permeate the important Resolution 2334 of the UN Security Council (2016), which was adopted with the support of 14 Members of the Security Council (with only the US abstaining); yet 10 years have passed and the international community has failed to infuse the Resolution with concrete content. (A similar argument can be raised with respect to the 2024 advisory opinion of the ICJ.)
For the sake of completeness, one has to note that with respect to settlement products, the EU refrains from granting them preferential treatment and it demands special labelling for them, but it stops short of adopting the more assertive action of banning these products. In fact, in June 2025, the Foreign Ministers of nine EU Member States (Belgium, Finland, Ireland, Luxembourg, Poland, Portugal, Slovenia, Spain, Sweden) attempted to reinforce the differentiation instrument, by calling upon HR Kallas to offer proposals on how to discontinue EU trade with Israeli settlements in the Territories.Footnote 156 Yet, the fact that only nine Member States supported this initiative reinforces the prediction that the EU will not be able to move to a policy based on formal, legally based sanctions.
The conclusion regarding the ineffectiveness of the differentiation instrument raises the broader question of why the EU does not employ instruments of negative conditionality to the State of Israel, a question addressed above. The article does not argue that such a course of action would necessarily render the EU’s contribution to the two-state solution more effective. After all, Israel has traditionally favoured security considerations over any other considerations. Hence, economic pressure in itself, without security guarantees, might not secure the consequences that the EU desires.
In fact, two interrelated developments render the possibility of an effective EU intervention even more improbable. The first is the Hamas attack on Israel on 7 October 2023, an attack that renders Israeli society and political forces more inclined towards security considerations and unilateral use of force than towards diplomatic resolution of conflicts.Footnote 157 This result is only likely to be reinforced as a result of Israel’s attack on Iran (13 June 2025), the subsequent attack by the United States (22 June 2025), followed by the joint US–Israel attacks on Iran (commencing 28 February 2026). These attacks may reinforce reliance by Israel on the United States and on the use of military power, and may cause Israel to ascribe even less importance to the EU, its normative power, its soft-power instruments and its trade instruments. The second is the dominant role that the second Trump administration has assumed in the Middle East and beyond, a role which is both the cause and manifestation of the decline of the EU and the erosion of principles and the values that the EU represents, such as diplomacy, multilateralism, rule-based external policies, and peaceful resolution of conflicts.Footnote 158
In the light of these developments, it should be underscored that the article does not argue that the employment of negative instruments is required or would ensure a more effective contribution on the part of the EU; nor does it argue that it can be assumed that the EU may serve as an effective peace-broker. It merely argues that without pursuing instruments of negative conditionality towards the State of Israel, the EU’s policies and intervention are most likely to remain ineffective.
5. Summary and conclusions
Since the 1970s, the EU has expressed its continuous commitment to contributing to the resolution of the Israeli–Palestinian Conflict, a commitment that evolved since 1999 into a policy of consistent support for the two-state solution. This policy of the EU was promoted by the adoption towards Israel of the linkage instrument and the differentiation instrument. Yet, the EU’s long-standing commitment to the resolution of the Conflict based on international law has not achieved that goal; nor has it prevented the incremental perpetuation of the Conflict. The article thus identified a dissonance between the EU’s strong interest in the resolution of the Conflict, its firm commitment to such resolution and its engagement in promoting such resolution, and its actual ineffective contribution to achieving that goal. The article aimed to offer a better understanding of this dissonance, by analysing the causes of the ineffectiveness of these two principal instruments, and consequently the ineffectiveness of EU policy itself. This analysis was developed within the overarching theoretical framework addressing the EU’s actorness and effectiveness in its external relations. The conclusions of the article regarding the EU’s ineffectiveness are then re-examined (and validated) against the background of recent hostilities that are taking place in the Middle East following the Hamas attack on Israel in October 2023. The conclusions of the article can serve as a stepping stone for examining the limits of relying on trade-related instruments, based on international law, to advance conflict resolution in other parts of the world.
Acknowledgements
The views and analysis presented in this article reflect my own, personal scientific work and in no manner do they represent the Hebrew University. I would like to express my gratitude for the valuable comments of Toby Greene, Amichai Magen and Maya Sion with respect to previous drafts, and of my research assistants, Yuval Abramovich and Lotem Neuhaus. All views expressed in this article and all errors remain those of the author.
Funding statement
Not applicable.
Competing interests
The author declares none.
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