Israeli Prime Minister Benjamin Netanyahu has said Israel must adapt its economy to global sanctions, citing weaker international support and a possible end to US financial and military aid.
Public opinion toward Israel has grown more negative amid the wars in Gaza and Iran. In the United States, a recent Chicago Council on Global Affairs report recorded the country’s lowest favorability rating since its polling began in 1978, with a majority supporting a reduction or end to military aid.
Last month the UK announced a ban on imports from illegal Israeli settlements in the occupied West Bank. Foreign Secretary Ed Miliband described settlers as “terrorists” supported by Netanyahu’s government and accused them of ethnically cleansing Palestinians. The same day, 11 other countries, including France, Spain and Canada, joined Britain in a statement supporting the two-state solution and announcing plans to impose or consider restrictions on trade with the settlements.
“We must understand that there could be sanctions, including banking sanctions,” Netanyahu said in an interview aired on Israel’s Channel 10 on Friday. He added that Israel needs an alternative economy able to function by circumventing those sanctions, and said blockchain technology, which underpins cryptocurrencies, was among the options under consideration. He said he had already requested an implementation plan.
Netanyahu also said that “it’s only a matter of time” before US military aid is completely “over.” He told Israelis that if they expect to keep receiving what he secured twice — tens of billions of dollars in American aid for the defence budget — they should prepare for that not to happen because America has changed.
Under an agreement signed in 2016, Washington committed to providing $38 billion in military aid through 2028. Netanyahu has previously said he wanted to phase out the financial component of US military assistance within ten years.
Former prime minister and opposition figure Yair Lapid said Netanyahu now admits, in his own words, that if his government is returned to power, American military aid will end and Israel will face sanctions that will devastate the economy, trigger uncontrolled price surges and cause irreparable damage.
The comments come days before Israel’s first national election since the October 7 Hamas attacks. Accountability for security failures, the cost of living, ultra-Orthodox military service and the country’s international standing are among the issues facing voters. Neither Netanyahu’s allies nor the opposition have a clear path to a parliamentary majority.