The Central Bank will no longer authorise the sale of Israeli bonds in the EU, a welcome development given that the agency raising the funds had linked them with financing the war effort in Gaza. In future the sale of the bonds in the EU will be authorised by the Luxembourg authorities.
The precise sequence of events which led to the move is not clear. Did the Israeli authorities change where their bonds were authorised, encouraged to do so by the protests in Ireland? Or did the Central Bank make it clear it did not want to continue to do so, or would not be quick to authorise a new issue? It had previously indicated that it had no real choice in the matter, once the prospectus was drawn up within the rules.
Either way, the Central Bank – and the Government – will be relieved at the turn of events. And it is a victory for the protesters who raised the issue and have been campaigning for change.
The prospectus approved by the Central Bank in September 2023 said that the funds were “intended to be used for the general financing purposes of” of the state of Israel. However, the Development Company for Israel (International) Ltd, which marketed the bonds, linked them on its website to raising funds for the war in Gaza.
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The Government and various State bodies here would no doubt wish that the worlds of international politics and economics could be kept apart. But the reality is that they cannot, particularly in an era where the US president sees everything through a political prism and uses American economic power to achieve wider policy goals.
This means that economic moves – such as that on the bonds, or the Occupied Territories Bill – have wider consequences in terms of Ireland’s international relations. While the protesters chide the Government for not moving fast enough, Ministers say that Ireland has been a leading voice arguing for forceful EU action against Israel. The Coalition will hope for more support from other EU members, as the appalling humanitarian crisis in Gaza deepens and Israel shows no sign of relenting, despite calls to do so from many allies.
US support for Israel appears to remain firm, however. And so there may be diplomatic and economic consequences for Ireland for its criticism of the campaign in Gaza and for policies which are perceived to be anti-Israeli. The bonds story will fit into this narrative, notwithstanding the uncertainty about what exactly transpired.
More decisions lie ahead for the Government with implications for US relations, not only concerning Israel but also, for example, in the regulation of digital technology companies in the EU, where Ireland is a central player. A State which has generally chosen to prioritise its economic ties with the US is facing into ever choppier waters. It’s unavoidable that, at times, doing the right thing will put this relationship under pressure.
