It seems that the disputed military attacks led on Gaza by Israel in the past weeks have caused first tangible consequences for its external economic relations.
Last week, it was reported that EU Commissioner Benita Ferrero Waldner froze the plans to upgrade its economic relations with Israel (for further information, see the following article in the Guardian). Initially, the Community and Israel agreed on intensifying their current bilateral relations in summer 2007 (see here for the statement of the EC-Israel Association Council). Such an upgrading would have enhanced cooperation between the two parties on a number of fields, ranging from trade-related issues and science and technology to security matters. It is often considered that such an agreement would have been particularly advantageous to Israel.
This endeavour seems now to be halted or at least postponed. While there is, up to now no official Commission statement, EU diplomats gave to understand that there was a clear link between the military operations and the freezing of the negotiations of the upgrading. These military actions were widely considered violations of international human rights and humanitarian law (we discussed this issue here, here and here).
Of course, officially this step is not named an “economic sanction”. Yet, one may wonder whether the refusal to proceed with an enhancement of economic cooperation for human rights reasons does not have a slight coercive element in it, which may qualify it as a sanction. In any event, this step seems to have hit the Israeli government somewhat by surprise: Its ambassador to the EU had declared only a few days ago that he “don’t expect any change to the process of upgrading relations” (see the following article from the EUObserver).