Israel is fighting a new war on the financial front – and it is not ready - opinion

Yaakov Katz argues that Israel is unprepared for a potential comprehensive sanctions regime, warning that recent British, French, and Canadian restrictions on settlement trade could expand to target the broader Israeli economy. He traces the erosion of diplomatic taboos from his own 2022 column warning about Russian-style sanctions, through the 2024 Biden administration's sanctions on Israeli settlers, to current UK and European sanctions on ministers Bezalel Smotrich and Itamar Ben-Gvir. Katz warns that post-election West Bank annexation could accelerate the process, threatening Israel's EU trade relationship — €43.3 billion in 2025, accounting for 33.1% of imports and 29.4% of exports. He argues that a broad sanctions regime would cause brain drain, investment decline, and fundamental economic change, and criticizes political leaders for dismissing European institutions as irrelevant while Prime Minister Benjamin Netanyahu cannot travel to Europe. The column was published as Netanyahu addressed the UN on Thursday.