European Commission (EC) President Ursula von der Leyen condemned Israel’s actions during the annual State of the Union on Wednesday, and announced a partial suspension of the Association Agreement. 

“The actions and statements by the most extremist ministers of the Israeli government, which incite violence,” stated Von der Leyen. ‘She added these extremist ministers “undermine the vision of a viable Palestinian state, and we must not let that happen.”

The Association Agreement was signed in June 2000 to establish fair competition and free trade between EU member states and Israel. According to the EU, Israel is their 31st largest trading partner, representing almost 0.8 percent of its total trade in goods with the world in 2024. The Association Agreement also provides a framework for political discourse between the two parties. 

In June 2025, the EC reviewed Article 2 of the Association Agreement, which states:

‘Relations between the Parties, as well as all the provisions of the Agreement itself, shall be based on respect for human rights and democratic principles, which guides their internal and international policy and constitutes an essential element of this Agreement.’

The request was supported by 17 EU member states, following Israel’s blocking of humanitarian aid to Gaza. The review of the Association Agreement is permitted when one party is found to be violating human rights. Furthermore, it allows the reviewing party to take ‘appropriate measures’, which may include suspending the agreement.

Von der Leyen also announced the creation of a Palestine Donor Group in her speech, including a dedicated instrument for Gaza reconstruction, during the State of the Union address. The EC’s proposed sanctions for Israeli extremists were also announced to be forthcoming.