A picture taken on April 2, 2017 shows Israel’s David’s Sling missile defence system during a ceremony to announce its operational capacity at the Hatzor Air Force base.
Jack Guez / AFP
Ursula von der Leyen gave her usual but unusually controversial State of the Union speech on September 10, 2025, in front of the European Parliament. Aside from other predictable talking points such as enduring support for Ukraine, clean energy, and European defense, Israel came up, too. The president of the Commission proposed sanctions on “extremist ministers and on violent settlers” as well as a “partial suspension of the Association Agreement on trade-related matters.”
Her announcement, intended as a reaction to the humanitarian crisis in Gaza, provoked both applause and boos from the MEPs present, as all factions have their distinct and diverging, often moralistic standpoint on Israel. The question, however, that Europe must ask itself before any action is taken, is whether it is in the EU’s interest to cut, even partially, trade relations with Israel.
Many quick reactions to the announcement pointed out that the EU is Israel’s largest trading partner, with a 32% share of its trade. last year. Therefore such a decision would hurt Israel’s economy disproportionately. Although this is naturally not true vice versa, the EU does import crucial products from Israel, especially in the field of defense and dual-use technologies. Arms imports from Israel by European nations increased by 155% between 2020 and 2024 compared to the previous five years, driven largely by the new security concerns of the bloc. Israel has become a key player in the global arms trade, climbing to eighth place in arms exports, with major European buyers like Germany and the UK highlighting its growing influence. In 2024, Israel’s total defense exports surged by 13%, reaching a record high of nearly $15 billion. The growth was driven primarily by sales of missiles, rockets, and air-defense systems, with over half of the exports (54%) delivered to strengthen military capabilities of EU countries. A salient example is Germany’s purchase of Arrow 3 from Israel, an advanced defense system against long-range ballistic missiles, which was the largest defense deal for the country, accounting for $3.5 billion. Other examples include David’s Sling, a medium-range air and missile defense system sold to Finland in 2023, or Heron UAVs sold to multiple European countries and just recently to Germany too, as well as loitering munitions, such as Harop drones, used for precision strikes.
The significance of Israeli defense and dual-use exports to Europe is not primarily their volume: it is that they are constantly tested on the ground. Unlike European countries, Israel has been under attack practically without interruption for decades, forced to use and test its capabilities in real combat situations, leading to the development of cutting-edge technologies in satellites and space systems, air defense, radars, electronic and cyber warfare, as well as artificial intelligence.
Cutting Israeli defense exports to the EU would do Ukraine no good either—ironically, the opposite of what von der Leyen has been advocating for, even in her State of the Union speech. Although Israel has cautiously avoided exporting arms to Ukraine directly, they still reach the war-torn country indirectly. For example, an Israeli defense company sold anti-drone systems to Poland, which was transferred to Ukraine. Anti-drone systems are, in fact, one of the key elements of Ukrainian defense (with many having started to refer to the Russo-Ukrainian war as a ‘drone war’), and Israel has the most advanced technologies and know-how on countering drone attacks.
Another example is Slovenia transferring Soviet-era M-55S tanks that had been upgraded by Elbit Systems, an Israeli defense company, to Ukraine.
But even if we do not consider these indirect arms exports, the fact remains that European militaries can only supply Ukraine with arms because they send older materiel to Ukraine and restock with cutting-edge equipment to fill the capability gaps created by the aid. Thus, there is an important role Israeli technologies play in the re-armament of Europe, a policy applauded by almost all countries and political groups of the EU.
This is not the first time ideology or moralizing has been prioritized over economic realities. Europe lags behind its chief rivals in terms of competitiveness, something that is now acknowledged in the mainstream European discourse. The EU—with von der Leyen playing a substantial role—has jeopardized its automotive industry for the sake of the green transition, rushed to decouple from Russian energy as part of the sanctions against Moscow, and adopted the world’s first strict AI regulation—while its competitors have done none of that. While in all the above cases, as well as in the case of Israel, there is room for moral debates and multiple perspectives, Europe seems to always forget what its competitors do not: the harsh reality of economic and security self-interests.
Von der Leyen has found herself under growing pressure recently. There has just been a vote of no confidence against her this summer, with the Left and the conservatives competing on who can submit the next no-confidence motion first. Although it is highly unlikely that the EP would ultimately dismiss her (and her entire Commission, since a successful vote of no confidence removes not just one person, but the body), it signals clear discontent with her work from both sides of the aisle.
The EU chief has been facing criticism from the Left for a while for failing to take action against Israel. The second-in-charge in the Commission, Teresa Ribera, has recently ‘rebelled’ against her boss and called the Gaza situation a “genocide”, raising the stakes. (The Commission’s executive vice president also implicitly criticized the tariff deal von der Leyen struck with Trump.)
The political pressure from the Left to take more action against Israel comes at a time when von der Leyen is facing general dissatisfaction among Europeans, with a recent survey showing that 60% of citizens think she should quit. In short, she has limited room for maneuver and is under pressure to raise stakes and appeal to the Left in order to maintain the uninterrupted support of the EP majority.
Currently, it is unclear exactly what sanctions or restrictions could be introduced against Israel. Suspending the trade aspects of the association agreement in itself would not constitute a general arms embargo, but rather result in the imposition of tariffs. However, some member states, such as Ireland or Spain, do advocate for a general arms embargo. The full suspension of the EU-Israel Association Agreement—which could only be decided unanimously, needing the support of less hawkish capitals such as Budapest, Rome, or Berlin—remains a highly improbable scenario, whereas partial suspension (on trade particularly) can be done by a qualified majority. While unlikely to happen overnight, even radical scenarios (such as a full arms embargo) could soon become reality if the political discourse shifts due to further developments in Gaza or power games in Brussels. In the meantime—, Europeans should be aware that what is happening is yet another chapter in the slow killing of European competitiveness: prioritizing ideology over the economic interests and realities of our continent.
