German PM Friedrich Merz stated he is against the European Union reviewing its association agreement with Israel over alleged human rights violations in Gaza.

“Invalidating or terminating this agreement is out of the question for the federal German government,” Merz said in a speech at the Bundestag (Federal Parliament) on Tuesday.

The European Commission launched an investigation into whether Israel has violated its human rights obligations under the EU-Israel Association Agreement. This followed demands from a majority of EU countries to review the deal amid the humanitarian crisis in the Gaza Strip.

A leaked draft text reveals that Israel’s actions “may have violated” the provisions of the association agreement, a comprehensive pact in force since 2000 that covers economic cooperation, political dialogue, and trade in key sectors.

German Foreign Minister Johann Wadephul also opposed calls to suspend the agreement, arguing at a meeting with his colleagues earlier this week that the bloc “needs good relations with Israel.”

This stance puts Germany on a collision course with other EU member states, such as Spain and Ireland, which are demanding the immediate suspension of the agreement.

No immediate action is expected following the EU foreign ministers’ discussion on Israel on Monday, but the issue will likely be on the agenda for their next meeting in July.

As unanimity cannot be reached for a full suspension, legal experts suggest it may be possible to suspend the trade-related part of the agreement, which would require the support of a “qualified” majority.

Although Merz has recently criticized Israel’s military operations in the Gaza Strip with uncharacteristically harsh language for a German leader, Berlin remains one of the country’s most steadfast supporters.

This position was also evident after Israel launched its strikes on Iran. “There is no reason for us, and for me personally, to criticize what Israel initiated a week ago,” Merz said at an industry summit in Berlin on June 23.

Merz also called for a ceasefire in the Gaza Strip yesterday, stating that the people in the region, “especially women, children, and the elderly,” must be shown “humane treatment.”

A sudden spike in oil prices, triggered by the conflict between Israel and Iran, has prompted European Union (EU) leaders to reconsider their plans to lower the price cap on Russian oil from $60 to $45 per barrel.

Leaders are concerned that the conflict in the Middle East will further inflate global oil prices, making it unfeasible to tighten sanctions in the current environment.

EU foreign ministers were expected to discuss lowering the price cap at their meeting in Brussels on Monday. However, two diplomats who spoke to Politico stated that this plan is no longer considered viable due to the escalating military tensions between Israel and Iran.

“Given the international situation and volatility in the Middle East, the idea of lowering the price cap is unlikely to gain traction,” one diplomat said. “At the G7 meeting this week, all countries agreed to postpone this decision for now. Prices were quite close to the cap, but now they are fluctuating up and down; the situation is too volatile at the moment.”

Sudden oil price increase disrupts plans

Brent crude, which had been trading below $68 per barrel since early April and had twice fallen below $60, saw its price surge into the 70-79 range after Israel launched a bombardment against Iran last Friday. Russia’s Ural oil was being sold at a discount of more than $10.

European Commission President Ursula von der Leyen noted at the G7 summit earlier in the week that the effectiveness of the current $60 price cap had diminished due to falling prices in the spring.

“However, we have seen oil prices rise in recent days, and the current price cap is serving its purpose,” von der Leyen stated. “Therefore, there is little need to lower it for now.”

Effectiveness of sanctions under debate

The primary goal of the price cap is to reduce Russia’s revenues, as approximately 40% of its budget is allocated to the war. However, achieving this requires a clear oversight mechanism for stricter restrictions, which Russia has largely learned to circumvent using its own “shadow fleet.”

According to an analysis by the Centre for Research on Energy and Clean Air (CREA), a $45 per barrel price cap in May could have reduced Russia’s oil export revenues by 27%, or €2.8 billion. However, experts at the center noted, “This calculation is based on strict and full compliance with the restrictions, which is not at the desired level even now.”

US participation is key

The idea of new sanctions has not found support from Donald Trump, who suggested that Europe should take the first step. According to Maria Shagina, a sanctions expert at the International Institute for Strategic Studies, lowering the price cap without the US would be ineffective.

“Since the price cap was designed as a buyers’ cartel, its implementation requires US participation,” Shagina explained. She argued that it would be better to focus on combating the circumvention of existing restrictions, as “more than 90% of crude oil is currently sold at a price above $60 per barrel.”

Tatyana Mitrova, a researcher at Columbia University’s Center on Global Energy Policy, acknowledged that a lower price cap would be less effective without US involvement. Still, she noted that “the EU and the United Kingdom hold a key advantage in maritime insurance, which would create serious obstacles to sanctions evasion in any case.”

Several European officials familiar with the discussions told Bloomberg that some EU countries believe a lower price cap would only work if the US also participates in the restrictions.

The German government will provide funding for an additional 11,000 military personnel by the end of the year, according to a report by the newspaper Bild on Saturday, June 21, which cited government sources. This represents an increase of approximately 4%.

The newspaper added that this funding will cover 10,000 soldiers and 1,000 civilian staff through the end of 2025. The decision is part of this year’s budget plan, which is set to be approved by the cabinet next week. The capital required for the expansion will be included in this year’s federal budget.

According to the report, the new positions will span the army, air force, navy, and cyber forces.

German Defense Minister Boris Pistorius stated earlier this month that an additional 60,000 soldiers are needed to meet NATO’s armament and personnel targets. The alliance is bolstering its forces, citing a growing threat from Russia.

The proposal will be a top agenda item at the cabinet meeting next week.