Israel has met the European Union’s sanctions proposal with a strong message of defiance, but this raises a crucial question: what happens next if the sanctions are approved and Israel simply ignores them? The potential aftermath could lead to a protracted and escalating cycle of economic and diplomatic conflict.
If the sanctions are implemented, their immediate effect will be financial. Israeli exporters will face higher costs, and sanctioned individuals will lose access to their European assets. Israel’s first response would be to absorb these costs and seek alternative markets and financial systems to mitigate the damage.
However, if the EU feels its measures are being flouted, it could be pushed towards escalation. This could involve expanding the list of sanctioned individuals, increasing the range of goods subject to tariffs, or, in a more extreme scenario, moving towards a full suspension of the Association Agreement, which would be a devastating blow to the Israeli economy.
Israel could also retaliate. It might impose its own countersanctions on European goods, downgrade diplomatic relations with certain EU countries, or reduce security and intelligence cooperation, which is highly valued by many European states. This could trigger a tit-for-tat cycle that would be damaging for both sides.
The path of defiance could lead to a long, cold war between Israel and its largest trading partner. It would likely result in Israel’s further economic and political isolation from the West, pushing it to strengthen ties with other global powers. The EU’s gamble is that the initial economic pain will be enough to avert this downward spiral.