European Commission President Ursula von der Leyen Calls for Suspension of the EU-Israel Free Trade Agreement Amid Ongoing Gaza Conflict

European Commission President Ursula von der Leyen on Wednesday said the commission would seek to suspend the trade elements of the EU-Israel association agreement and freeze bilateral EU support for Israel (except for funds for civil society groups and the Yad Vashem Holocaust memorial), citing the humanitarian crisis in Gaza and Israeli government actions she said undermine a two-state solution.

In her annual state of the union address to the European Parliament in Strasbourg, von der Leyen denounced settlement plans that would fragment the occupied West Bank and condemned incitement by extremist Israeli ministers. She said the commission will prepare proposals to suspend the trade elements of the association agreement and seek sanctions aimed at extremist ministers and violent settlers in the West Bank. She also said the commission would pause some bilateral support for Israel while maintaining funding for civil society programs and Yad Vashem.

Von der Leyen backed the recently announced trade deal with the United States, calling it a source of stability and cautioning that turning it down might have sparked a wider trade dispute. She reaffirmed the EU’s focus on climate and social issues, promising a plan to eliminate poverty in Europe by 2050 and announcing a review of limits on children’s access to social media — insisting that “parents, not algorithms, should be raising our children.”

She described Europe’s inability to agree on a response to Gaza as “painful” and framed the move on trade and sanctions within a broader call for the EU to act more decisively in foreign policy, including ending consensus-based decision-making. On Russia, she said the EU “stands in full solidarity with Poland” after reported violations of Polish airspace, urged greater pressure on President Vladimir Putin to negotiate, and called for expanded sanctions and measures to phase out Russian fossil fuels and clamp down on the shadow fleet transporting Russian oil.

Von der Leyen praised the new trade agreement with the United States, emphasizing its role in maintaining stability and warning that refusing it might have sparked a broader trade dispute. She also emphasized the EU’s commitment to climate and social issues, highlighting plans to implement a strategy aimed at eliminating poverty across Europe by 2050. Additionally, she noted the intention to explore regulations on children’s use of social media, stating that “parents, not algorithms, should guide the upbringing of our children.”

Reactions in the parliament were mixed. Iratxe García Pérez, leader of the Socialists, said the steps were “too little, too late” and criticised the EU–US trade deal; Greens co-leader Terry Reintke called the measures “a message of modest change” that must be implemented. Jordan Bardella, leader of the far-right Patriots group, criticised the trade deal with the US. Far-right MEPs heckled parts of von der Leyen’s speech, including her comments on vaccination rates and a disinformation initiative.

The EU is Israel’s largest trading partner, with annual trade in goods and services of about €68 billion. The EU-Israel association agreement, signed in 2000, created a free-trade area and cooperation in research, environmental policy and other areas.

Von der Leyen also said the commission is exploring a new financing solution for Ukraine’s war effort tied to about €300 billion in frozen Russian assets held in the West, including the concept of a reparations-style loan that would leave the assets legally intact while using their value to support Ukraine. The EU has so far avoided outright confiscation of Russian assets, citing risks to eurozone stability.