Israeli economists warn of economic damage from potential European sanctions

A group of senior Israeli economists, academics, and former public officials has issued a warning regarding the potential for European sanctions to cause significant damage to the Israeli economy. The Economists' Forum stated that settlement expansion in the West Bank and escalating violence could trigger diplomatic and economic repercussions, including increased costs of living and greater difficulty in conducting business.

The warning follows various international moves to restrict trade related to settlements. The group noted that the Netherlands has implemented a ban on settlement products, while the United Kingdom, France, and Canada have expressed intentions to implement similar restrictions. In the United States, Democratic senators have introduced legislation aimed at sanctioning parties involved in construction within the E1 area east of Jerusalem.

Furthermore, the economists highlighted that the United Nations has expanded its ‘blacklist’ of companies linked to settlements, which includes certain Israeli banks. They cautioned that if sanctions expand to include sectors such as construction, infrastructure, finance, and insurance, it could lead to a substantial deterioration in economic relations between Israel and Europe, affecting trade, investment, and access to financial services.