Senior Economists Warn International Sanctions Threaten Israeli Economy
61 senior Israeli economists warn that upcoming European sanctions over settlement expansion and E1 construction threaten severe, irreversible damage to the economy and trade relations.
A group of 61 senior Israeli economists, including former senior officials from the Ministry of Finance and the Bank of Israel, issued a severe warning on Sunday regarding potential heavy damages to the national economy due to escalating international and European sanctions. In a petition organized by the Economists Forum, the signatories warned of a darkening cloud over the economic future of Israel, driven by planned measures from European nations—led by the United Kingdom—following the expansion of construction in the E1 corridor.
Escalating Sanctions and Global Economic Isolation
The petition, signed by prominent figures from academia, the high-tech sector, finance, and former central bank leadership, emphasizes the growing risk of deteriorating economic relations between Israel and core Western trade partners. The backdrop to these measures includes the expansion of construction in E1, settler violence in the West Bank perceived as state-backed, and the broader government policy in the ongoing war in Gaza following the events of 7 October.
The economists noted that the United Nations has expanded its blacklist of companies linked to settlements. The registry now includes 214 corporations, predominantly Israeli, spanning 11 countries. The blacklist notably features all major Israeli banks as well as the food conglomerate Tnuva, which is controlled by a Chinese state-owned enterprise.
Key Signatories and Projected Impact on Cost of Living
The petition was signed by notable figures including former National Economic Council head Prof. Manuel Trajtenberg, former Bank of Israel Governor Prof. Jacob Frenkel, former Ministry of Finance Directors-General Avraham Ben-Bassat, Yarom Ariav, and David Brodet, as well as former Supervisor of Banks Yair Avidan.
Projected Economic Consequences
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Expansion of economic sanctions targeting construction firms, banks, and insurance providers operating in settlements.
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International banks and multinational corporations curtailing business ties with Israeli enterprises.
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Further exacerbation of the soaring cost of living, compounding recent surges in food prices.
The economists warn that over 50 countries have already enacted 100 specific sanctions against various entities, heavily concentrating on arms trade and financial services. They conclude that the expansion of West Bank settlements and the failure to curb extremist violence inflict profound diplomatic damage, foster international isolation, and impose a heavy economic toll on all citizens.
