The European Union has reportedly paused internal discussions on imposing sanctions against "Israel" to avoid disrupting US President Donald Trump's proposed ceasefire plan for the Gaza Strip, according to EUObserver, citing diplomatic sources.

Even low-level working groups within the Council of the EU have been instructed not to deliberate on the European Commission’s sanctions proposal in Brussels this week.

EU diplomats cited Germany and Italy’s positions as key to the decision. Both countries are opting to wait for the outcome of Trump’s ceasefire initiative, which is being discussed this week in Cairo.

"Nobody wants to take steps that could get in the way of the talks," one EU diplomat was quoted as saying.

The European Union’s rapid decision to shelve even preliminary sanctions discussions the moment a ceasefire plan was introduced underscores a deeper pattern of political complicity. While European officials solely criticized "Israel’s" actions in Gaza, the bloc’s swift withdrawal from concrete punitive measures reveals a reluctance to challenge "Israel" in practice.

This hesitation highlights a broader unwillingness among EU states to hold "Israel" accountable, particularly when US-led initiatives are involved.

Europe deep military and financial ties undermine Gaza accountability
 

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As the EU stalls on sanction talks to align with the US proposal, this signals more than geopolitical caution: it reflects a deeper entanglement with Israeli military capacity via trade, investment, and research funding.

Between 2014 and 2022, EU states granted export licenses to Israel worth €6.3 billion, covering weapons, ammunition, military vehicles, and aircraft parts. Germany, the bloc’s largest supplier, approved €326.5 million in arms shipments in 2023 alone before sharply reducing its licenses in 2024. Meanwhile, financial institutions across Europe have provided over €36 billion in loans/underwriting and hold €26 billion in securities tied to major defense contractors supplying the Israeli regime.

Moreover, EU research and defense funding continue to link European public money to Israeli military tech firms. For example, Israel Aerospace Industries (IAI) acquired Greece’s Intracom Defense in 2023; this firm is now deeply embedded in 15 European Defense Fund (EDF) projects. Elbit Systems and other Israeli companies have also benefited from EU Horizon grants for “civilian” or dual-use technologies, which could have military applications.

What this suggests is that Europe’s current reluctance to impose sanctions may soon face growing pressure. Civil society, legal bodies, and moral voices will likely intensify demands for accountability, especially given evidence that European states are not just trading weapons but also subsidizing the technological infrastructure behind surveillance, munitions, and systems used in Gaza.

If Europe continues to resist tougher measures, this could lead to domestic political backlash, legal challenges, like export license litigations, and deteriorations in its credibility on human rights, which is already happening.

A realignment of policy may be forced, either through stronger EU-wide arms embargoes, suspension of defense and research cooperation with Israeli firms, or stricter ethical and legal oversight of funding and investment flows. 

Trump’s proposal under review

On September 29, Trump revealed a 20-point plan aimed at resolving the war in the Gaza Strip. The proposal includes an immediate ceasefire, the release of captives within 72 hours, and the formation of a "technocratic, apolitical Palestinian committee" to govern Gaza. This body would be supervised by an international board led by Trump.

On October 3, the Palestinian movement Hamas announced its agreement to transfer governance of Gaza to a Palestinian committee based on national consensus. Hamas also stated its willingness to release all living Israeli captives and return the bodies of the dead.

The group confirmed its participation in broader discussions concerning Gaza’s future as part of a unified Palestinian structure.

Read more: How Trump cornered Netanyahu into Gaza ceasefire plan: FT