The European Commission President, Ursula von der Leyen, has called for a suspension of trade with Israel, as she spoke of Europe’s “painful” inability to respond to the war on Gaza and ensuing humanitarian disaster.

In her annual “state of the union” speech to the European parliament in Strasbourg, von der Leyen criticised plans for illegal settlements that would split the occupied West Bank in half, as well as incitement of violence by extremist Israeli Ministers, as a “clear attempt to undermine the two-state solution.”

Describing Europe’s inability to agree on a response to Gaza as painful, von der Leyen said that the EU executive would freeze its bilateral support for Israel, apart from funds for civil society groups and the Yad Vashem holocaust memorial centre.

She added that the commission would also table proposals to suspend the trade parts of the EU-Israel association agreement and draft sanctions against Israeli extremist ministers and violent settlers in the West Bank.

It remains unclear whether the divided EU will find the majority to suspend trade, as a less ambitious measure to freeze Israel’s participation in the EU’s research programme remains blocked.

The commission previously considered sanctions against two far-right Israeli Ministers, Itamar Ben-Gvir and Bezalel Smotrich, for their incendiary statements against people in Gaza, but stopped short of tabling the proposal, fearing it would not get the unanimity required.

The European Union’s most powerful official warned Wednesday that Europe is battling against a series of threats posed by Russia, new global trade challenges and even other major world powers and must stake claim to its independence.

New Measures To Help Ukraine

In the State of the Union speech, European Commission President, Ursula von der Leyen announced new measures to help Ukraine fight off Russia’s full-scale invasion.

She also defended the deal she reached with US President Donald Trump to limit the impact of his global tariff war, despite agreeing to a 15% duty rate for most European exports to the United States.

“Europe is in a fight. A fight for our values and our democracies. A fight for our liberty and our ability to determine our destiny for ourselves. Make no mistake — this is a fight for our future. Battle lines for a new world order based on power are being drawn right now.”
Ursula von der Leyen

She added that the EU “must fight for its place in a world in which many major powers are either ambivalent or openly hostile to Europe,” stating, “This must be Europe’s independence moment.”

Turning to Russia’s war on Ukraine, now in its fourth year, von der Leyen said that Russian President Vladimir Putin shows no sign of ending the war, and that “our response must be clear too.”

She expressed the need for more pressure on Russia to come to the negotiation table. “We need more sanctions,” she said. The commission and EU member countries are working on a new raft of sanctions targeting Russia’s energy revenues.

Von der Leyen also said that new ways to address Ukraine’s financial challenges must also come through the use of frozen Russian assets in Europe. Almost 200 billion euros ($235 billion) worth of those assets are being held in a Belgian clearing house.

Interest earned on the assets – around 3.5 billion euros ($4.1 billion) were generated last year – are already being used to help prop up Ukraine’s war-ravaged economy. Von der Leyen said that a “reparations loan” for damage inflicted by Russia is being weighed.

She also announced the creation of a “drone alliance” with Ukraine – drones have become a decisive factor in the war – with 6 billion euros ($7 billion) in funds for the effort.