Published by Global Banking and Finance Review
Posted on July 30, 2025
By Andrew Gray
BRUSSELS (Reuters) -The European Union is considering partially suspending Israeli access to funding under its flagship research programme, in what would be the bloc's first action taken against Israel in response to its actions in Gaza.
EU member states' ambassadors held initial talks on the proposal on Tuesday. Here is an outline of the proposal, its significance and the prospects for its adoption:
WHAT HAS BEEN PROPOSED?
The $100 billion Horizon Europe programme provides research and innovation funding for EU members and partner countries.
The European Commission proposed on Monday that Israel-based companies be no longer eligible for the programme's funding for start-ups and small and medium-sized firms to "develop and scale up innovations with the potential to create or disrupt markets".
Since Horizon Europe began in 2021, Israel-based companies have received some 200 million euros in grants and equity investments under this scheme, known as the Accelerator of the European Innovation Council, according to Commission officials.
WHY HAS THE COMMISSION MADE THIS PROPOSAL?
The Commission argues that the thousands of civilian deaths and acute malnutrition among Palestinians, especially children, resulting from Israel's actions in Gaza violate a human rights clause in an agreement that governs its relations with the EU.
The Commission, which is the EU's executive body, is proposing to freeze Israeli participation in one of the programmes based on that agreement.
WHY THIS PARTICULAR PROPOSAL?
While there is no close connection between the humanitarian crisis in Gaza and funding for Israeli startups, the Commission proposal is an attempt to send a political signal: it would be the first concrete action by the bloc in response to Israel's conduct of the war.
Some countries, such as Germany, Hungary and the Czech Republic, have been reluctant to take any EU action against Israel - traditionally a close ally. Other members, such as Ireland and Spain, have been highly critical of Israel and called for a strong EU response.
Most EU foreign policy measures require the support of all members. But Monday's proposal requires only a qualified majority - at least 15 of the EU's 27 members, representing at least 65% of its population.
WHAT HAS ISRAEL SAID ABOUT THE PROPOSAL?
The Israeli foreign ministry on Monday described the proposal as "mistaken, regrettable, and unjustified" in a post on X.
The ministry said it would work to "ensure that this recommendation is not adopted by the member states" and declared that "Israel will not yield to pressure when it comes to its national interests".
WHAT OTHER REACTION HAS THERE BEEN?
Amnesty International's EU director, Eve Geddie, said such a proposal was "long overdue, limited in scope and grossly inadequate given the scale of Israel's serious violations of international law and the full range of political, diplomatic and economic tools available to the EU".
WHAT HAPPENS NEXT?
The proposal does not yet have enough support to pass but several countries, including Germany, have yet to take a final position, according to diplomats, referring to the ambassadors' discussion on Tuesday. Germany's final position may determine whether the measure goes ahead, the diplomats said.
Diplomats will continue discussing the proposal but no date has been set for a decision.
(Reporting by Andrew Gray and Lili Bayer; editing by Philippa Fletcher)
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