A new report revealed that the European Union (EU) has become “the main engine of Israel’s economy of genocide,” surpassing the United States, providing crucial revenue and resources that sustain Israel’s illegal occupation and assault on the Palestinian people, while China and India rank as Israel’s third and fourth-largest trading partners.

A report by SOMO, the Centre for Research on Multinational Corporations, titled “Economic sanctions now: the EU is Israel’s largest investor,” stated that one-third of Israel’s total trade in goods in 2024 was with the European Union, amounting to €42.6 billion, significantly higher than its €31.6 billion trade with the United States.

The report comes amidst EU foreign ministers are meeting in Brussels to discuss possible sanctions on Israel failed to reach a unanimous agreement, despite an EU report concluding that Israel is in breach of Article 2 of the Israel-EU Association Agreement, which stipulates that human rights and democratic principles must be respected, acknowledging Israel’s violations in the West Bank and Gaza.

According to the report, the European Union was the largest among the five biggest investors in Israel in 2023, when taken as a bloc of all member states. However, it also highlights that, according to UNCTAD’s 2025 World Investment Report, global foreign direct investment (FDI) into Israel actually increased in 2024.

The report notes that the largest foreign investors in Israel after the European Union and the United States are China, Canada, and Switzerland. Interestingly, Israel’s own reporting identifies the Cayman Islands as a major investor, contributing $23 billion in foreign direct investment (FDI) in 2023.

However, due to major discrepancies, nearly half of Israel’s reported inward FDI originating from unspecified sources, the report primarily relies on data submitted by the investing countries themselves.

SOMO reveals that the Netherlands is responsible for two-thirds of the EU’s total investment in Israel, making it the single largest investor in the country, surpassing even the United States and investing ten times more than Germany.

This exceptionally high level of investment is partly attributed to the Netherlands’ role as a tax haven and conduit country. As a result, the Netherlands ranks as the second-largest source and destination of foreign direct investment (FDI) globally, with more than $5 trillion in foreign capital flowing through it.

On the other hand, the report highlights that the EU is by far the largest destination for Israeli investments. Israel has invested €66 billion into the EU economy, more than seven times its investment in the United States.

Notably, the Netherlands stands out as the top recipient, receiving €47.3 billion, followed by Cyprus with €6.9 billion and Germany with €4.9 billion.

This dynamic shows that the EU, and especially the Netherlands, benefits significantly from Israel’s economy.

“Because of the significant corporate and economic interests, any EU action on economic sanctions against Israel will be greatly challenged by those profiting from Israeli investment,” the report observed.

The NGO report states that, according to data from the European Commission and UN COMTRADE, the European Union is Israel’s largest trading partner.

“One-third of Israel’s total trade in goods with the world in 2024 was with the EU,” said the report, noting that the total value of EU-Israel trade that year reached €42.6 billion, substantially higher than Israel’s trade with the United States, which stood at €31.6 billion.

China and India were Israel’s third and fourth-largest trading partners.

Hence, the report pointed out that “This means that the EU is the key supplier of both goods and resources to Israel, as well as Israel’s biggest market in terms of sales. That makes the free trade provisions included in the EU-Israel Association Agreement crucial for Israel’s economy, and suspending them could have a tremendous impact.”

The report holds the European Union complicit in enabling Israel’s genocide in Gaza, as total trade in goods between the EU and Israel actually increased by one billion euros between 2023, the year the genocide started, and 2024.

They noted that the rise in trade was driven by increased exports from the European Union, implying, since the onset of the genocide, the EU has “actually increased its supply of resources to Israel’s economy,” thereby “providing the country with essential resources to sustain its economy of genocide and occupation.”

“The EU imported €15.9 billion worth of goods from Israel, primarily machinery, transport equipment, and chemicals. Conversely, the EU exported €26.7 billion worth of goods to Israel, also mainly machinery and transport equipment,” read the report.

SOMO has strongly urged the European Union to act in accordance with its legal obligations under the UN Genocide Convention, which requires states to employ all means reasonably available to prevent genocide.

Given the EU’s considerable economic influence over Israel, the report emphasizes that the bloc has the power and the duty to suspend the EU-Israel Association Agreement and impose sanctions.

Doing so would “switch off a vital engine for its economy,” significantly curbing Israel’s ability to continue its military occupation and genocidal actions.

Article 2 of the European Union-Israel trade agreement states that “relations between the Parties, as well as all the provisions of the Agreement itself, shall be based on respect for human rights and democratic principles, which guides their internal and international policy and constitutes an essential element of this Agreement.”

The report also references the July 2024 advisory opinion of the International Court of Justice (ICJ), which determined that Israel’s military and settler presence in the Occupied Palestinian Territories is illegal.

The ICJ stated that all states must “abstain from entering into economic or trade dealings with Israel […] which may entrench its unlawful presence in the territory,” and must “take steps to prevent trade or investment relations that assist in the maintenance of the illegal situation.”

Instead of continuing to profit from Israel’s economy, which the report terms an “economy of genocide and occupation,” SOMO argues that the EU has both the responsibility and the opportunity to leverage its vast economic power to demand an end to Israeli atrocities in Gaza and the West Bank. T

The report stresses that the EU must not allow its economic interests to take precedence over human rights and Palestinian lives.

Among the urgent measures recommended are a comprehensive arms embargo and bans on dual-use technologies, high-tech equipment, raw materials like oil and gas, and any other goods that might support Israel’s military operations.

Highlighting the findings of UN Special Rapporteur Francesca Albanese, SOMO further calls for full corporate accountability, noting that many companies operating in Israel are directly complicit in the ongoing genocide. The EU must ensure that all corporations assess their activities and divest where they are at risk of contributing directly or indirectly to Israel’s violations of international law.

“Twenty-one months into the genocide,” the report said, “EU governments must draw a long-overdue red line and hold Israel accountable. That should start with a full arms embargo, economic sanctions, and corporate accountability.”

Meanwhile, Israel is continuing its genocide in Gaza, even as global condemnation mounts, further exposing the scale of its crimes.

Since October 7, 2023, the Israeli occupying forces have been waging a relentless assault on the Gaza Strip, resulting in the killing of 58,386 people so far, the majority of them women and children, and injuring 139,077 others, with the toll still incomplete.

Many victims remain trapped under the rubble or lie on the streets, as ongoing bombardment and the widespread destruction of infrastructure have made it impossible for ambulance and civil defense crews to reach them.