EU Proposes Freezing Israel Trade Pact As Smotrich Declares Gaza ‘Real Estate Bonanza’

On Wednesday the European Commission presented a proposal for new tariffs and sanctions aimed at pressuring Israel to quickly end its military operations in Gaza, in addition to sanctions measures on two Israeli ministers known for their fiery anti-Palestinian rhetoric.

“The horrific events taking place in Gaza on a daily basis must stop,” EU Commission President Ursula von der Leyen said after presenting the proposal to the EU Council. “There needs to be an immediate ceasefire, unrestrained access for all humanitarian aid, and the release of all hostages held by Hamas.”

The measures would if implemented constitute a major, historic blow to EU-Israel relations. The commission appears to be largely responding to the new Gaza City offensive, confirmed to be in full swing this week, and the major United Nations investigation just released which concluded that Israel is guilty of genocide.

“We’re not proposing to suspend trade with Israel, we are proposing to suspend trade preferences,” said a senior unnamed European official.

A decades-long deal and trade-related pillar of the Israel-EU Association Agreement is reportedly what’s on the chopping block. According to Middle East Eye:

Trade Commissioner Maros Sefcovic said on Wednesday that if a qualified majority is reached, the EU will impose 230m euros ($166m) tariffs on 37 percent of the 15.9bn euros of the EU’s imports from Israel, instead of free trade. 

Israel is the EU’s largest trade partner. In 2024, EU-Israel trade reached a record 42.6bn euros, of which 37 percent is “preferential treatment”, according to the EU’s foreign policy chief Kaja Kallas.  

“So definitely this step will have a high cost for Israel,” Kallas told Euronews on Tuesday.

The two ministers being targeted in the potential new measures are National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich. They would face asset freezes and a blanket travel ban for travel within the European Union.

Smotrich’s latest Wednesday comments will not at all help his case in the eyes of European officials. He has newly stated that the Gaza Strip that the Gaza Strip is a “real estate bonanza.” Further he claimed to be in talks with the Americans on how to divide the enclave up once the Palestinians are kicked out.

There is “a real estate bonanza” in Gaza that “pays for itself” and he has “already started negotiations with the Americans,” he said at a conference in Tel Aviv, according to local media.

“We have poured a lot of money into this war. We have to see how we are dividing up the land in percentages,” Smotrich said, explaining that “the demolition, the first stage in the city’s renewal, we have already done. Now we just need to build.”