Although the European Union (EU) positions values such as human rights and the rule of law as the cornerstone of its foreign policy on international platforms, it faces a serious test in translating this values-based approach into concrete policy instruments in the context of discussions on sanctions against Israel. Against this backdrop, reactions towards Israel are growing within the Union. However, the initiative by Spain and Ireland to suspend the EU-Israel Association Agreement has been blocked by Germany and Italy. This situation clearly highlights the difficulty in developing a common foreign policy position due to the unanimity rule, which paralyses decision-making mechanisms within the EU’s Common Foreign and Security Policy.
Whilst the humanitarian crisis in Gaza and settlement policies in the West Bank are creating pressure for tougher sanctions within the EU, the profound differences between member states’ historical and strategic priorities are preventing this pressure from being translated into an institutional decision. Consequently, this situation does more than merely highlight the structural limitations of the EU’s capacity to formulate foreign policy. It also brings with it a profound crisis of legitimacy in terms of the Union’s institutional architecture, its identity of values and its geopolitical orientation.
The following question becomes particularly relevant: why was the initiative by Spain and Ireland to suspend the EU-Israel Association Agreement blocked by Germany and Italy? The answer to this question lies in the historical, normative and structural dynamics that shape the foreign policy preferences of Member States. For Germany’s policy towards Israel is one of the most deeply rooted examples of foreign policy within the European integration process. The experience of the Holocaust serves not merely as a historical backdrop in German foreign policy, but also as a foundational normative framework. The concept of “Staatsräson” developed within this framework has made Israel’s security an integral part of Germany’s state raison d’être. This significantly limits Germany’s foreign policy toolkit and renders hard power elements, such as economic sanctions, normatively problematic. From Berlin’s perspective, comprehensive sanctions against Israel are viewed not merely as a political tool, but also as an action that conflicts with historical responsibility. Consequently, Germany prefers critical diplomacy, targeted pressure and multilateral dialogue mechanisms over sanctions.
Germany’s position is not limited solely to historical responsibility. Berlin’s stance is also directly linked to its systemic role within the EU. It is understood that Germany, as the EU’s economic engine and institutional stabilizing force, has assumed the responsibility of safeguarding the Union’s cohesion in the realm of foreign policy. Elements such as global financial markets, defense industry ties, and Israel’s high-tech and investment ecosystem are at the center of economic and technological networks that directly influence Berlin’s foreign policy choices. The potential for tougher sanctions against Israel to deepen new divisions within the EU—particularly along the North-South and West-East axes—constitutes a serious risk factor for Germany. In this context, Germany is adopting a cautious and restrictive stance to prevent the Union from drifting toward a fragmented structure in the realm of foreign policy.
Italy’s stance, however, differs from Germany’s in that it is shaped not so much by historical responsibility as by geopolitical interests and a pragmatic approach to foreign policy. Italy views its relations with Israel as a strategic necessity due to energy security and defense industry cooperation in the Mediterranean basin. Technical cooperation in areas such as counterterrorism and intelligence sharing has led Italy to adopt a cautious approach toward sanctions decisions. For Italy, maintaining relations with Israel is not merely a foreign policy choice but also an indispensable security parameter for preserving regional stability. In this context, Italy believes that sanctions would close diplomatic channels rather than produce a solution and argues that the EU must continue its engagement with Israel.
At this point, it is necessary to address another dimension of the debate that is often overlooked but is nonetheless decisive: global economic networks and capital relations. Interpreting the EU’s discussions on sanctions against Israel solely through the lens of normative values or state policies offers an incomplete analysis. This is because there are multilayered economic and financial dynamics that indirectly influence decision-making processes and often operate as background variables. Particularly for export-driven economies like Germany and Italy—which are highly integrated into the global economic system—the issue is not merely a diplomatic choice but also a matter of aligning with the international economic order. Israel, meanwhile, is more than just an actor maintaining commercial ties with Europe; it is a production and innovation hub deeply integrated into global economic networks in fields such as high technology, the defense industry, cybersecurity, artificial intelligence, and financial innovation. For this reason, broad-based sanctions against Israel have the potential to directly impact not only interstate trade but also a multi-layered economic sphere that affects multinational corporations, investment funds, and global supply chains.
In this context, the fundamental behavior pattern of global capital is critical. Capital is always in search of stability, predictability, and minimized political risk. Strong EU sanctions against Israel could directly plunge the Middle East operations, technology partnerships, and R&D networks of Europe-based multinational corporations into an environment of uncertainty. Germany’s automotive, chemical, and high-tech giants, along with Italy’s industrial production and defense supply chains, are deeply integrated into global production networks. This situation results in such sanctions effectively becoming a transfer of economic costs. This is why Berlin and Rome are acting not only to safeguard bilateral diplomatic relations but also to protect these companies’ global competitiveness and supply chain continuity. Particularly in critical sectors such as cybersecurity, the defense industry, and artificial intelligence, the intense mutual interdependence between Israeli and European economies is leading to concerns that the sanctions decision could have a boomerang effect on European economies.
Within this framework, Israel is building an innovation ecosystem that is deeply intertwined with U.S. and European capital, particularly in the areas of cybersecurity, defense technologies, and artificial intelligence startups. This situation implies that potential sanctions go beyond being merely a diplomatic tool, carrying the risk of fragmentation and restructuring within the global technological ecosystem. Consequently, for economies reliant on industrial exports, such as Germany, this type of disruption poses the risk of long-term loss of competitive strength and a setback in access to advanced technology. Furthermore, the intertwined structure of the Israel-based high-tech and security ecosystem with European financial and industrial systems reinforces assessments that potential political and geopolitical tensions could create ripple effects not only at the level of foreign policy but also directly on investment security and market stability. Consequently, the debate over sanctions is shifting from a purely normative framework toward a rational cost-benefit analysis focused on protecting the industrial base and addressing strategic dependencies.
Particularly, U.S.-based global financial and technology capital is not merely an external factor but also one of the most critical elements structurally limiting the EU’s room for maneuver in foreign policy. Major U.S. investment funds, technology companies, and defense industry networks have become so deeply integrated with Israel’s innovation ecosystem that this has evolved into a global economic backbone. Multinational companies operating within the EU are directly dependent on the U.S. financial system for their financing sources and access to capital markets. To protect shareholder value and ensure the uninterrupted continuation of their operations in U.S. markets, the boards of these companies must align with the geopolitical priorities of U.S. capital.
A strict sanctions regime against Israel has the potential to jeopardize not only European-Israeli relations but also the operational continuity of American capital in Israel. Therefore, the global pressure on European companies to align with capital flows is transforming sanctions decisions from a diplomatic choice into an operational risk management issue. As long as companies remain an integral part of U.S.-based technology and financial networks, they are acting in contradiction to their own economic rationality. This situation constitutes one of the major structural obstacles preventing the EU from developing an independent, values-based sanctions policy against Israel.
Given this context, it would be inaccurate to explain Germany and Italy’s blocking stance solely based on political or historical reasons. This situation is also a result of the structural dependency relationships produced by global capitalist integration. Therefore, the issue is not merely one of being for or against Israel, but also a matter of maintaining competitive strength and institutional sustainability within the global economic system. From a broader perspective, the EU’s debate over sanctions against Israel creates a three-pronged tension. These areas are the claim to normative power (human rights and international law), the historical-political burdens of states, and global capital integration. Within this three-pronged structure, global capital often operates as an invisible yet decisive “silent veto actor.” Rather than directly blocking explicit political decisions, it narrows the scope for decision-making by increasing costs, altering risk perceptions, and leveraging economic dependencies.
This multi-layered structure creates a structural deadlock in decision-making within the EU when Germany’s approach, rooted in historical responsibility, is combined with Italy’s economic-pragmatic stance. If this structure deepens further, the EU’s foreign policy capacity will inevitably become caught between two distinct rationalities. On one side lies a normative, values-based claim to foreign policy, while on the other stands a pragmatic economic rationality aligned with global capital. To the extent that this friction persists, the EU’s foreign policy identity could increasingly become fragmented, contradictory, and limited.
If this fragmentation becomes entrenched at the institutional level, three main scenarios emerge for the EU. First, the EU could move away from centralized decision-making in foreign policy and adopt a structure based on flexible, variable, and issue-specific coalitions. In this scenario, the Union could evolve into a fragmented foreign policy framework where different groups of member states take the lead for each crisis. Second, there is a risk that the EU’s claim to normative power will gradually erode, and that it will lose its identity as an actor that exports value within the international system. The third and more structural scenario involves an increasing gridlock in decision-making processes, leading to a weakening of the EU’s capacity to intervene in global crises and its transformation into a reactive and delayed actor.
When these three scenarios are considered together, the fundamental challenge facing the European Union is not so much the weakness of its foreign policy capacity as the profound transformation of the Union’s existential nature within the international system. As a result, these developments are increasingly pushing the EU’s ambitious foreign policy identity—shaped by normative values—into the background. Instead, the Union is being transformed into a pragmatic status-quo preservation mechanism where economic and security interests take precedence over global geopolitical imperatives. This situation demonstrates that the EU’s foreign policy has ceased to be an independent actor exporting universal values and has instead become a subsystem fully aligned with the global architecture of capital and security. The Union’s future is taking shape as a coordination hub defined not by a set of values but by global economic chains and security networks.
