EU power struggle erupts between von der Leyen and Kallas over trade ban on Israeli settlements

Brussels — A long-running internal EU feud is set to erupt into the open on Monday, as foreign ministers examine a range of contentious legal options for banning trade with illegal Israeli settlements.

For months, European Commission President Ursula von der Leyen has been locked in a power struggle with the European External Action Service (EEAS), the EU's diplomatic corps led by Kaja Kallas, over who should control foreign policy.

Push for an EU-Wide Ban

Countries including France, Spain, Belgium, Sweden, Ireland, and the Netherlands have called for an EU-wide ban on trade with illegal settlements, arguing it is imperative to bring the bloc into line with international law.

Kallas, herself under pressure from 11 foreign ministers, has pressed her colleagues in the Commission and accused them earlier this year of stymieing work on a legal review she requested in April.

Even as von der Leyen's Commission circulated the long-anticipated legal advice to member states last week, it was evident that the EU executive was far from enthusiastic about such a move.

"I don't think we had joyful cooperation from the Commission on this," said a senior EU diplomat whose country supports a ban.

Three Legal Options Proposed

The Commission's paper stopped short of making an official proposal, instead suggesting various legal ways to restrict or prevent the flow of goods from settlements. The three options are:

• Imposition of a tougher licensing system
• Exorbitant tariffs
• An all-out ban

Disagreement Over Voting Threshold

The Commission's paper intensified debate over what threshold of agreement should be required to move forward — a question that appears legalistic but is crucial for any proposed measures to succeed.

Countries in favour of banning trade with settlements argue it should be treated as a trade measure, requiring a qualified majority rather than unanimity among member states.

However, the Commission wrote in its paper that all 27 countries should be required to agree to any prospective move, as it would be more of a political, foreign policy question rather than a technical trade measure.

The document was written by a close circle of officials around von der Leyen, a former German defence minister and Christian Democrat, a source told Euractiv.

"The Commission paper stops short of calling for unanimity. But if you read it, it seems very clear that that's what it thinks," the diplomat said.

Requiring unanimous approval would allow any single country in the 'no' camp — such as Germany or the Czech Republic — to block the measure. Berlin strongly argues the move should be considered a foreign policy sanction, requiring all 27 countries to agree.

Around a dozen countries, backed by the Council of the EU's in-house lawyers and pro-Palestine academics, reject that position.

Italy, a country that could tip the scales toward a qualified majority for a trade-based proposal, has signalled openness to considering one. A group of foreign ministers is expected to argue that it is absurd not to expect international trade policy to contain a strong foreign policy element, and to accuse the Commission of delaying tactics.

Kallas herself acknowledged earlier this year that there was neither unanimity nor a lower qualified majority — of at least 15 countries representing two-thirds of the EU's population — for any move.

Broader Context

The Commission formally proposed sweeping sanctions against Israel last September, including suspending the trade perks Israel enjoys under its Association Agreement with the EU.

Many argue that was such a steep political hill that it was destined never to find consensus among national governments, who have not agreed on it to date.

Von der Leyen's Commission is now employing the argument that since there is no unanimity on passing the largest sanctions, there should not be too much effort put into new ones — but some national diplomats view that as cynical.

Asked about the separate question of trade with illegal settlements — which is not covered by the EU Association Agreement with Israel — von der Leyen passed the buck onto national governments last week, telling reporters: "The ball is in the court of the member states."

Next Steps

Helen McEntee, the Irish foreign minister, has called for a vote "as soon as possible" after the presentation of the legal options. However, the EU's political calendar — and Israel's, with looming elections — suggests a period of further stasis is likely.

After Monday's meeting, EU foreign ministers will not convene formally again until 12 October, when Israel is likely to be at the height of its election campaign. The Israeli general election will take place on 27 October, the country's coalition government announced.