Israel offers cash support to settlement firms after European trade bans

Israel is planning cash grants for companies operating in illegal settlements in the occupied West Bank after several European countries moved to restrict trade in their goods. The support package is aimed at helping affected firms find new buyers in Asia and South America, according to the supplied report. The move comes as European governments face pressure over how to respond to human rights concerns linked to the settlements.

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The plan would provide up to 200,000 shekels, or about $54,000, per company. Roey Fisher, who heads Israel's Foreign Trade Administration at the Ministry of Economy and Industry, said a dedicated team has been set up to help companies identify alternative markets. He said the team is looking at destinations including the Philippines, India, the United Arab Emirates, Chile and Argentina.

More than 25 applications for assistance have already been submitted by firms that expect to be affected. Fisher said the immediate reach of the bans should not be overstated, arguing that not all European countries are applying them in the same way. He said Spain and the Netherlands are among the only places in Europe where there is an effective boycott.

He also said countries that have announced boycotts, including England, have not applied them to all Israeli exports. The report also says the assistance covers exporters of fresh produce, suggesting the impact may be felt across several parts of the settlement economy. The policy matters because trade restrictions on settlement goods are one of the few economic tools available to governments seeking to pressure Israel over the occupied West Bank.

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The settlements are widely regarded internationally as illegal, and the issue remains central to disputes over the future of Palestinian territory. By offering direct support to affected firms, Israel is signalling that it intends to shield settlement-linked businesses while trying to preserve export flows to other markets. The report says the UK and the European Union together account for more than a third of Israel's exports, which helps explain why even partial restrictions can create concern in government and business circles.

Julie Norman, an associate fellow at Chatham House, said the grants would give exporters a significant lift as they look for new markets, but she said the financial effect of the bans remained uncertain. She added that the support highlights the difficulty of targeting settlements economically when they continue to receive backing from the Israeli government. What remains unclear is how many countries will fully enforce the bans and how much trade will actually be diverted.

It is also not yet clear whether the grants will be enough to offset lost sales in the short term. The next developments to watch are whether more European states tighten their measures and whether the Israeli support scheme expands beyond the initial applications already submitted.

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