The European Commission’s reported options paper on Israeli settlements shows a familiar Brussels instinct: when hard power is out of reach, reach for market power instead.[1] That approach has defined much of the EU’s external posture for years, from sanctions to regulation, and it remains one of the few areas where the bloc can still claim strategic weight.
But leverage is only useful if the Union can sustain it. The question is not whether Brussels can draft measures; it is whether capitals will back them when diplomacy becomes costly. The EU’s foreign policy machinery routinely moves slower than the crises it is meant to address, and adversaries have learned to exploit that delay.
This is not just about the Middle East. It is about Europe’s place in a harsher global order where trade, security, energy, and migration are increasingly fused. In that environment, every European decision has a geopolitical consequence, and every pause looks like hesitation.
The broader European debate reflects that shift. Analysts warning of the decay of the liberal order argue that institutions are being hollowed out by rising external pressure and internal legitimacy crises, leaving governments to talk more about sovereignty and security than about universal rules.[3]
For the EU, that means the age of clean distinctions is over. Trade policy is foreign policy. Industrial policy is security policy. And every attempt to project values abroad now has to survive the messier politics of 27 member states with different histories, interests, and red lines.
