Europe condemns war on Gaza yet fuels 'Israel’s' defense industry boom
4 Min Read
Despite growing outrage over Gaza, European nations continue to rely heavily on "Israel" for arms, complicating efforts to pressure Tel Aviv.
-
A man walks past the empty stand of Israel Aerospace Industries with an empty Rafael stand seen at the Dubai Air Show in Dubai, United Arab Emirates, Monday, Nov 13, 2023 (AP)
As "Israel" continues its genocidal campaign in Gaza, and with recent bombings in Qatar fueling further outrage, several European governments are voicing strong opposition to "Israel" and even floating potential sanctions. Some countries are also revisiting diplomatic and trade relations, particularly in light of the ongoing aggression.
Despite these shifts in tone, including limited arms export restrictions and symbolic support for Palestinian statehood, "Israel's" multi-billion-dollar defense industry remains untouched. In 2024 alone, European states accounted for more than half of "Israel's" total arms exports, purchasing approximately $8 billion worth of weaponry and defense systems.
This continued reliance on "Israel" comes at a time when European NATO members are under pressure, particularly from Trump policies, to boost defense spending to 5% of GDP by 2035, up from the 2% benchmark established in 2014. The urgency of this build-up has only increased since Russia launched its military operation in Ukraine in 2022.
Sentiments change, arms procurement steady
Elbit Systems Ltd, Rafael Advanced Defense Systems Ltd, and Israel Aerospace Industries (IAI) are the entity’s three largest defense manufacturers. They not only sell to Europe but have embedded themselves within its defense supply chains through local partnerships and subsidiaries.
According to two unnamed senior Israeli defense officials, public sentiment may be turning against Tel Aviv, but European procurement continues undeterred.
Public protests across Europe have called for an end to arms cooperation with "Israel", specifically targeting its defense corporations. In Germany, Elbit’s facility in Ulm was vandalized. In the UK, protests by Palestinian Action, now designated a "terrorist group" by the UK government, have targeted Elbit locations, prompting the company to keep some of its European operations undisclosed.
Discreet deals, ongoing contracts
Despite public opposition, European governments continue to deepen military cooperation with "Israel". Elbit Systems operates 40 subsidiaries worldwide, with at least half located in Europe. Facilities in the UK, the Netherlands, and Romania have recently expanded operations due to rising demand.
The company, headquartered in occupied Haifa, employs around 2,000 people across Europe, about 10% of its global workforce, and runs a multinational flight training academy in Greece.
In 2023, Elbit doubled its sales to Europe compared to 2021, reaching $1.8 billion. In August, it secured its largest contract to date, a $1.6 billion deal with an undisclosed European nation.
Rafael, famous for developing the Iron Dome and Iron Beam defense systems, distributes and manufactures missile systems in Germany through the Euro Spike GmbH joint venture with Diehl Defense and Rheinmetall. Nearly 45% of its international revenues now come from Europe, with further ventures planned under the Euro Dome and Euro Spyder projects.
No decline in demand
Despite a recent German directive restricting arms shipments potentially usable in Gaza, such as spare parts for tanks, the broader cooperation remains intact. Just days later, Berlin reportedly advanced plans to acquire three Heron drones from "Israel" in a deal worth nearly €1 billion ($1.2 billion).
Two Israeli officials noted that some European foreign ministries have asked procurement divisions to delay new purchases until a ceasefire is declared. Meanwhile, the UK denied entry to Israeli government representatives for a major defense expo in London, and Israeli firms have been barred from an upcoming aerospace event in the United Arab Emirates.
Even so, business flows have largely continued. IAI, the co-developer of the Arrow aerial defense system, earned two-thirds of its 2023 revenues from foreign sales. Its largest contract was with Germany, a $4.3 billion deal for the Arrow 3 missile defense system. IAI is also expanding on-ground presence in Europe, acquiring Greece’s Intracom Defense to solidify regional operations.
Rafael CEO Yoav Tourgeman captured the sentiment in an August interview for Calcalist, stating, “Despite the global uproar against Israel, the pace of orders from Rafael has risen year on year... Even if some of the projects have slowed down a bit, I estimate that if we end the war in Gaza, we will return to normal very quickly.”
