From billions to losses: How Europe is hitting Israel’s weapons market

The economic newspaper Calcalist reported today (Sunday) that Spain and Italy recently canceled their arms deals with Israeli companies Rafael and Elbit Systems.

According to the report, these contracts included the purchase of Lightning 5 bomb guidance systems worth over €200 million, Spike anti-tank missiles worth €250 million, and Popeye missiles valued at around €700 million, with Elbit Systems’ share of the deals totaling approximately €140 million.

In addition to the contract cancellations, European countries have imposed trade and maritime restrictions on Israel. Israeli military aid ships are barred from docking at Spanish ports, and exports of raw materials have been restricted.

Calcalist described these measures as part of Europe’s effort to pressure Israel to end the war in Gaza.

A senior Israeli defense industry official told Calcalist: “Continued contract cancellations and stagnation in signing new deals could lead to factory closures and a reduction in defense exports.”

Executives at Rafael and Elbit Systems have also expressed concern over a potential decline of several billion dollars in Israeli defense exports in the coming years.

According to Calcalist, Israel sold approximately $14.8 billion in arms in 2024, half of which went to Europe. If the trend of contract cancellations and international isolation continues, Israel’s weapons exports may shrink significantly in the coming years.