Israel has lost its European gateway for selling bonds to individual investors. Luxembourg’s financial regulator, the CSSF, let its approval of the Israel Bonds prospectus lapse when it expired on August 31, and Israel now has to persuade another EU country to take the job or give up that market. According to Israel’s Ministry of Finance, bonds sold in the EU bring in about $2.5 billion a year.
Finance Minister Gilles Roth told the broadcaster RTL that the regulator decided in May not to renew beyond August 31. A prospectus is the legal disclosure document that tells investors about a bond and its issuer before sale. Israel is not an EU member, so an EU regulator must approve it.
What the bonds are
Israel Bonds are issued through the Development Corporation for Israel (DCI). Each one is a loan from an investor to the Israeli government, which pays interest. The money is not tied to any purpose and joins general government financing, so it can pay for defence. The Jerusalem Post says the EU bonds are aimed mainly at Diaspora Jews and pro-Israel Jewish organisations.
Scrutiny grew after the October 7, 2023 Hamas-led attack and the war in Gaza that followed. The bonds were marketed worldwide that year as a way to “support Israel at War.” Amnesty International says Israel raised $4.5 billion on international markets through the sales between October 2023 and January 2025.
A technical dispute
Luxembourg inherited the role from Ireland, itself the successor to the United Kingdom after Brexit in 2020. Ireland’s central bank governor, Gabriel Makhlouf, confirmed last September that his country would not renew, after pressure from parliamentary and civil society groups. The Jerusalem Post reports that Israel’s Accountant General moved the work to Luxembourg in August 2025.
The CSSF’s stated reason was legal, not political. Director General Claude Marx told RTL that accepting transfers of the prospectus in consecutive years would “circumvent the European rules.” The European Securities and Markets Authority disagrees. A spokesperson told the Luxembourg Times: “Yes, a national competent authority can accept the transfer of the approval in two consecutive years,” while stressing that this was a general comment on the regulation. The CSSF replied that such transfers are meant to be exceptional.
The Jerusalem Post called the outcome an embarrassment for Israel. The Central Bank of Ireland told Irish media it had not received a request from Israel to approve the prospectus again.
Reaction
In July, Amnesty International urged Luxembourg, Ireland and all EU states to stop the sales or “risk complicity in Israel’s ongoing genocide against Palestinians in the Gaza Strip.” Steve Cockburn, its regional director for Europe, said Israel was “increasingly reliant on foreign investments to finance its genocide, apartheid and unlawful occupation.” Amnesty has welcomed Luxembourg’s decision. Israel’s Ministry of Finance said its Accountant General’s department “knows how to fully finance all government activities and needs,” pointing to more than NIS 700 billion raised since the war began.
Israel can still sell bonds elsewhere, notably in the United States, where the DCI has raised billions since 1951, about $2.5 billion a year. No replacement EU country has been named.
Sources
- Luxembourg drops approval for Israel Bonds issue: What that means
- Luxembourg halts Israel Bonds approvals, leaving EU future uncertain | The Jerusalem Post
