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Gaza's shadow falls on Europe's innovation pact with Israel

The EU's flagship innovation program faces a crisis of conscience as it considers pulling funding from Israeli firms developing technologies later deployed in military operations read more On Monday 28 July, the European Commission proposed suspending funding for Israeli startups involved in technologies with potential military applications. Horizon Europe is the EU'S key funding program for research and innovation, which Israel joined in 2021 as an associated country. Since then it has utilised the program's €95.5 billion and subsequently the EIC Accelerator program to fund startups and small businesses with disruptive innovations and emerging technologies as per the Accelerator program's objective. STORY CONTINUES BELOW THIS AD Grappling with the ethics of dual-use technology The proposal comes amid increasing pressure on the EU to take action regarding the situation in Gaza. EU and Gulf nations, including Saudi Arabia, have been increasingly aligned in calls for a ceasefire agreement. The suspension would specifically target Israeli startups developing technologies that could be used in military contexts such as cybersecurity, artificial intelligence, and drone technologies. The proposed suspension is not the first time that EU funding to Israel has come under scrutiny. Technologies developed with EU financial support have been used in military operations in Gaza, the most prominent example being the use of the Skylord Xtender drone technology by the Israeli drone manufacturer Xtend. Xtend received €50,000 as part of the EIC Accelerator program to optimize its Skylord Xtender drone technology and explore commercialization opportunities. Despite supposed prohibitions on direct EU support for military and defense projects, this drone technology was later adapted for military application by the Israeli Defense Forces. After October 7, 2023, the company shifted its focus 100% toward supporting the IDF, and the Skylord drones have been deployed in Israeli military operations in Gaza. Human rights at the forefront The European Commission's proposal, moreover, follows a review of the EU's association agreement with Israel. The report cites findings by EU auditors that indicate the non-alignment of Israel's actions in Gaza with the principle of respect for human rights. If implemented, the suspension could have far-reaching implications, potentially stifling innovation and collaboration between Israeli startups and European partners. The proposal now awaits member state deliberation, potentially setting the stage for the EU's first formal funding restriction against Israel since the escalation of the Gaza conflict.