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# THE CRACK IN THE WEST: 12 COUNTRIES BREAK THE TABOO AROUND THE SETTLEMENT ECONOMY
- URL: https://antonellanews.ghost.io/the-crack-in-the-west-12-countries-break-the-taboo-around-the-settlement-economy/
- Published: 2026-09-17T16:02:00.000Z
- Updated: 2026-09-28T16:05:17.000Z
- Description: THE CRACK IN THE WEST: 12 COUNTRIES BREAK THE TABOO AROUND THE SETTLEMENT ECONOMY This is not yet a rupture with Israel, but the political cost of standing still is rising.
- Author: Antonella Silipigni
- Tags: BRICS, Global South, Argentina, Israel, Smotrich, ICJ, EU, TRUMP, USA

This is not yet a rupture with Israel, but the political cost of standing still is rising.

**n 8 September, twelve Western governments took a step that, viewed in isolation, might appear modest: they opened the door to economically targeting trade linked to Israeli settlements in the occupied Palestinian territories. Yet when that decision is placed alongside the continued expansion of the E1 settlement project, the collapse in European trust towards the United States, growing pressure on public finances, the EU-Mercosur agreement provisionally applied from 1 May, new US commercial pressure on Latin America, the launch of the Isaac Accords by Israel and Argentina, and the expanding economic infrastructure of the BRICS, the picture changes. What looks like a small crack over Palestine begins to resemble a symptom of something deeper: the transformation of an international order in which alignment with the Western bloc is no longer cost-free, the Global South has an increasing number of alternatives, and even Washington’s closest partners are beginning to calculate how much it costs to continue saying yes.**

## **Twelve signatures, but the story begins earlier**

The first piece of evidence is dated **8 September 2026**, when Canada, Denmark, Finland, France, Iceland, Ireland, Norway, Poland, Portugal, Spain, Sweden and the United Kingdom issued a joint declaration announcing their intention to introduce national restrictions, support European measures, or seriously consider further action against trade in goods originating from Israeli settlements regarded as illegal under international law; France, the United Kingdom and Canada went further, committing themselves to national measures aimed at prohibiting that trade.

This is not an embargo against Israel, and that distinction is precisely what makes the move more interesting than it might initially appear, because **for the first time several important Western allies are attempting to translate a legal condemnation repeated for decades into a tangible economic consequence**.

Nine days later, a second piece of evidence lands on the table: Israel adds a tender for **2,167 additional housing units** to the E1 project, bringing the planned total to 3,401 homes, while Finance Minister Bezalel Smotrich openly presents the scheme as one capable of preventing the establishment of a Palestinian state; E1 is particularly controversial because its implementation would further fragment the West Bank and weaken territorial continuity between East Jerusalem and surrounding Palestinian areas.

The contradiction is difficult to ignore: **while part of the Western world is attempting to make the legal distinction between Israel and the occupied territories economically visible, the Israeli government is continuing to alter the physical territory on which that distinction would eventually have to become political**. This does not yet prove a strategic rupture, but it is the point from which the trail becomes worth following.

## **When international law meets money**

Behind the twelve signatures lies a document far more important than the communiqué itself: the **International Court of Justice advisory opinion of 19 July 2024**, in which the Court stated, among other things, that states must distinguish in their dealings with Israel between Israeli territory and the Palestinian territory occupied since 1967, and that they must not recognise as lawful, or provide aid or assistance in maintaining, the situation judged to be unlawful.

This language can remain abstract for years while confined to courtrooms and diplomatic files, but **international law changes character when it reaches customs offices, banks and balance sheets**, because the question then ceases to be merely whether settlements are illegal and becomes whether a government can coherently declare them illegal while continuing to finance, insure, import and invest as though that distinction did not exist.

That is what makes the decision of 8 September potentially significant, because today the target is merchandise, while tomorrow the same principle can move along the economic chain towards **credit, insurance, investment funds, infrastructure providers and companies that facilitate or profit from economic activity inside the settlements**.

The door through which law can begin to touch money has therefore been opened, and Israel’s reaction — including measures against the United Kingdom and the closure of the British consulate in East Jerusalem — indicates that the precedent is not being treated as irrelevant by those it affects.

The investigative question, however, remains the same: why now, after years of resolutions, legal opinions and diplomatic statements in which the illegality of settlements was already firmly established?

## **Domestic consent is becoming a political cost**

Part of the answer may lie far from the West Bank, inside the Western societies that these governments still have to represent, because in June 2025 YouGov found that in Britain, Denmark, France, Germany, Italy and Spain only **13 to 21 per cent** of respondents held a favourable view of Israel, while between 63 and 70 per cent held an unfavourable one, reaching historic lows in several countries.

Those figures do not provide a direct snapshot of September 2026, but they are an important clue because they show that **the electoral terrain on which relations with Israel are managed had already changed before some government policies began to move**.

The information environment has changed as well. Images, testimony and documentation emerging from Gaza, the West Bank and Lebanon no longer pass exclusively through governments, major television networks or international news agencies, but through local journalists, humanitarian organisations, international courts, OSINT researchers, digital platforms and civil-society networks, creating a volume of independently circulating evidence that makes it increasingly difficult to maintain an indefinite distance between what citizens can see and what their governments are prepared to do.

This does not mean that Western public opinion has become uniformly pro-Palestinian, because it has not, nor does it mean that Israeli security concerns, the hostages, Hamas or antisemitism have disappeared from public debate; what it does mean is something politically more destabilising: **the old narrative framework no longer guarantees that support for particular policies towards Israel will remain electorally inexpensive**.

When public opinion shifts while diplomatic policy remains fixed, that distance eventually enters parliamentary calculations, party strategies and ballot boxes.

The first jaw of the vice is therefore at home; the second lies within the alliance system that, for decades, has provided security, technology, intelligence and privileged access to an international order dominated by the United States.

## **Washington remains indispensable, but no longer cost-free**

In May 2026, the **European Council on Foreign Relations** surveyed almost twenty thousand people across fifteen European countries and found that only 11 per cent still considered the United States a true “ally”, down from 22 per cent in November 2024, while half described Washington as a **“necessary partner”** and a quarter as a rival or adversary.

That wording matters because it describes a relationship in which dependency can survive the erosion of trust, producing precisely the kind of environment in which an ally remains indispensable even as the political price of that dependency starts to be questioned.

On the ground, the same pattern becomes more visible. Reuters has documented how pressure from the Trump administration over NATO, uncertainty surrounding the American security commitment and rising defence-spending demands are accelerating efforts by European countries to diversify military procurement, while Canada, Germany, Poland and others seek capabilities that are not entirely dependent upon US technology.

Canada, meanwhile, has sought closer integration with the UK-led Joint Expeditionary Force and is deepening political, economic and military relations with the European Union.

On 17 September, almost as though the system had produced a live demonstration of the mechanism we were investigating, Canadian Prime Minister Mark Carney defended his country’s right to deepen its relationship with Brussels while Donald Trump raised the prospect of tariff consequences should Canada’s association with the European Union move further.

**No secret meeting is required to recognise pressure when tariffs, market access, military procurement, technology and security are openly used as bargaining instruments, because economic coercion among allies becomes part of the visible architecture of the relationship itself.**

That does not close the file on more opaque instruments of pressure. Surveillance, collection of personal vulnerabilities, political blackmail and *kompromat* are all historically documented tools within intelligence and influence operations and therefore remain legitimate investigative avenues whenever concrete indicators, intermediaries, networks or anomalies emerge. At this stage, however, the important point is that we do not need a hidden conspiracy to observe a system of pressure, because many of its levers are already sitting on the table in full view.

## **The bill for alliances eventually reaches the taxpayer**

Following the money takes us somewhere that appears far removed from the West Bank but is in fact central to the political equation: national budgets, where foreign policy stops being abstract and becomes measurable in the daily lives of citizens.

In July 2026, the International Monetary Fund published a report tellingly entitled **Europe’s Fiscal Squeeze**, describing mounting pressure on European public finances from ageing populations, pensions, healthcare, the energy transition, debt-servicing costs and defence.

The point is not to construct a caricature in which Washington decides which European hospital loses funding, because the mechanism is both simpler and more consequential: **when governments with limited fiscal room increase one category of expenditure sharply, those resources must ultimately come from stronger growth, additional borrowing, higher taxation or reduced room elsewhere**.

This is where geopolitics begins to enter ordinary life, because citizens already facing strained public services, high living costs and weak growth are being asked simultaneously to accept significantly higher defence expenditure and a security architecture whose priorities are increasingly being questioned by sections of their own electorate.

When that happens, the question “what exactly are we paying for?” stops being ideological and becomes economic, further narrowing the space within which governments can maintain foreign-policy commitments perceived as disconnected from domestic priorities.

And it is precisely while that room is narrowing that another piece of our map comes into focus.

## **1 May 2026: South America opens another door**

On **1 May 2026**, the interim EU-Mercosur trade agreement entered provisional application, linking a market of roughly **720 million people**, progressively reducing a wide range of tariffs and consolidating a relationship in which the European Union is already Mercosur’s second-largest trading partner, behind China but ahead of the United States.

What matters, however, is not simply the tariff schedule. In March 2026, Brazilian Foreign Minister Mauro Vieira described the agreement as a way to **“diversify our global partnerships”**, explicitly framing it as a geostrategic instrument in an increasingly fragmented international order and linking it to multilateralism, international law and cooperation.

Reuters had reached a similar conclusion even earlier, describing the EU-Mercosur deal as an indication of the **limits of Trump’s hardball diplomacy in Latin America**, where growing US pressure was helping drive regional governments towards greater diversification through Europe, China and other partners.

This is where the chronology matters, because **EU-Mercosur did not create American competition for South America, but it made the existence of an alternative considerably more concrete**.

The difference is fundamental: a country dependent upon a single major market may be forced to accept terms that a country with four or five alternative outlets can afford to negotiate.

Only a few months later, Washington imposed new 25 per cent tariffs on a range of Brazilian goods worth roughly $7 billion in exports, while Brasília denounced the measure as politically motivated and prepared a challenge through the World Trade Organization.

Peru offers another revealing case. During the first half of 2026, its trade with China increased by **35 per cent**, overtaking commerce with the United States, while Washington simultaneously intensified security, intelligence and military cooperation through its “Shield of the Americas” initiative; at the same time, Peru was moving forward with a trade agreement with India, which had already become its second-largest export destination after China.

Viewed separately, these developments can be filed under different labels — trade, narcotics policy, defence, tariffs, China — but **when placed on the same timeline they reveal a region in which the United States remains extraordinarily powerful while no longer being the only available door**.

And it is precisely here that demonstrations of strength begin to reveal vulnerability as well.

## **Power that must constantly be demonstrated tells us something**

The United States retains immense economic, financial and military leverage, and it would be absurd to confuse growing multipolarity with sudden American impotence; yet **an hegemonic system that increasingly needs tariffs, commercial threats, restrictions, security incentives and financial instruments in order to preserve an alignment that once flowed more naturally from structural dependency is simultaneously displaying its strength and the erosion of its exclusivity**.

That distinction lies at the heart of this investigation: what we are seeing is not the disappearance of American power, but its transformation from **near-automatic hegemony into a primacy that must increasingly be negotiated, enforced and defended**.

Israel appears on the same chessboard.

## **The Isaac Accords: Israel is looking towards the continent too**

On 19 April 2026, even before the provisional implementation of the EU-Mercosur agreement, Javier Milei and Benjamin Netanyahu formally launched the **Isaac Accords**, described by the two governments as a new strategic framework designed to deepen cooperation between Argentina, Israel and other “like-minded” partners across the Western Hemisphere, including coordination against Iranian influence and organisations designated as terrorist, cooperation in international forums, and greater integration in innovation, technology, trade and economic openness; the declaration explicitly presents the initiative as inspired by Donald Trump’s Abraham Accords.

The chronology prevents us from making the simplistic claim that EU-Mercosur “caused” this initiative, because **the struggle over Latin America’s political positioning was already under way**.

Yet by 29 June, when Milei addressed the Latin American conference of the Israel Allies Foundation and called for Latin America to be “unified” around the Isaac Accords, a strategy was becoming visible: an attempt to build a regional network of governments and legislators more closely aligned with Israel and, through the explicit Abraham Accords reference, with a particular US strategic architecture.

The investigative trail therefore does not point towards a single Washington-Tel Aviv command centre moving every Latin American government like a chess piece, a simplification that the evidence does not require; what it does show is **a strong convergence of strategic interests seeking to preserve political, diplomatic, technological and security influence in a region where Europe, China, India and the BRICS are expanding the alternatives available**.

And it is precisely the existence of those alternatives that changes the balance of power.

## **The Global South is rediscovering the language the West helped write**

Four days after the twelve-country declaration, the BRICS adopted their **New Delhi Declaration**, reaffirming Palestinian self-determination, support for a sovereign Palestinian state within the 1967 borders, opposition to forced displacement and the centrality of international law, while simultaneously emphasising sovereignty, territorial integrity and the UN Charter.

This does not make the BRICS morally immaculate guardians of international law, because their member states contain profound internal contradictions and, depending on the issue, apply legal principles selectively themselves; yet that fact does not erase the geopolitical paradox now taking shape: **the Global South is increasingly using the language of sovereignty, self-determination and international law — much of it codified within the post-1945 multilateral order built under Western leadership — to challenge what it sees as the selective application of that order by the very powers that created it**.

More importantly, it is building economic instruments capable of making that challenge less costly. The New Delhi Declaration explicitly discusses more efficient cross-border payments, interoperability between payment systems and greater use of **local currencies** in trade and investment among BRICS members; there is no BRICS currency ready to replace the dollar, and there is no imminent collapse of the US financial system, but there is clearly a strategy aimed at increasing the number of transactions that do not necessarily have to pass through US-centred monetary infrastructure.

That is precisely where the question of the so-called petrodollar needs to be put into perspective.

## **The petrodollar is not dead: what is shrinking is the monopoly over the exits**

Reducing American hegemony to the fact that oil is largely priced in dollars would be historically and economically inadequate, because the dollar’s central role rests upon a much broader architecture of deep financial markets, US Treasuries, international credit, trade invoicing, payment systems and the global reach of American banks; the **petrodollar has been one pillar of that ecosystem rather than the entire building**.

The numbers make this clear: in the first quarter of 2026, the US dollar still represented **57.13 per cent of officially allocated global foreign-exchange reserves**, while in the latest comprehensive Bank for International Settlements survey it appeared on one side of **89.2 per cent of global foreign-exchange transactions**.

Any claim that the dollar is collapsing would therefore be false.

Yet reading those same figures as evidence that nothing is changing would be the opposite mistake, because the dollar’s share of global reserves stood above 70 per cent in the late 1990s, while BRICS members, China, India and other states are increasingly developing local-currency settlement arrangements, alternative financing mechanisms and interoperable payment systems that **do not need to replace the dollar outright in order to alter its geopolitical leverage; they merely need to lower the cost of avoiding it in particular transactions**.

The more accurate formulation is therefore not the “collapse of the petrodollar”, but something subtler and potentially more consequential: **the progressive erosion of the exclusivity of the dollar-centred financial architecture**.

As long as there is only one door through which a country can trade, obtain finance and access international liquidity, whoever controls that door possesses extraordinary power; once there are two, four or six doors, the owner of the first remains immensely powerful, but no longer necessarily possesses the final word.

This is multipolarity seen not through summit communiqués, but through customs records, trade flows and payment systems.

## **And now we return to the twelve signatures**

With those pieces on the table, the 8 September declaration looks different, because the file is no longer telling us only about Palestine; it is telling us about Western governments caught **between the anvil of domestic consent and the hammer of external dependency**, while the rest of the world is simultaneously building markets, partnerships and financial infrastructure that make it less inevitable to choose the same side every time.

On one side are Western voters whose perception of Israeli policy has shifted substantially and governments that cannot ignore that change indefinitely; on the other is a relationship with Washington in which security and economic access remain essential but are increasingly deployed as explicit bargaining instruments; beneath both pressures sit national budgets in which defence, welfare, healthcare and energy compete for scarce resources, while outside the traditional Atlantic sphere lies a Global South offering markets, capital and partnerships without necessarily requiring the same degree of geopolitical alignment.

We can now add the South American piece: **EU-Mercosur has materially expanded one of those alternatives, strengthening Europe as a commercial channel in a region where China was already deeply entrenched and where India, Japan and other actors are rapidly increasing their presence**; the American response, involving tariffs, security initiatives, financial instruments and diplomatic pressure, can therefore be read not merely as a display of continuing US power but also as an attempt to slow the dispersion of a sphere of influence that can no longer be treated as automatically secure.

Likewise, the Isaac Accords demonstrate that Israel is participating in the same regional competition, building a political and security architecture explicitly intended to expand towards other governments across the hemisphere just as significant parts of the Global South consolidate an almost opposite diplomatic position on Palestine.

Taken individually, these developments could be filed in separate folders; **taken together, they form a sufficiently coherent convergence to support a serious investigative hypothesis: the transition towards a multipolar order is not eliminating American hegemony overnight, but it is increasing the number of alternatives available, and every additional alternative gradually reduces the ability of Washington and its closest partners to turn pressure into automatic compliance**.

## **They may not be becoming braver; they may simply be doing the arithmetic**

This may ultimately be the key to reading the decision by the twelve governments, because we do not need to assume an ideological conversion on Palestine to understand their behaviour; **we only need to examine how the costs of remaining motionless are changing**.

Continuing as before can mean losing domestic consent, appearing increasingly subordinate to an ally viewed as less reliable, financing a more expensive security architecture, damaging relations with emerging markets that matter more each year, and defending a selective application of international law in front of states that have turned that selectivity into one of their most effective critiques of the Western order.

Moving, however, carries the opposite risks: Israeli diplomatic retaliation, US economic pressure, military dependencies that cannot easily be replaced and immediate industrial costs.

The result is not a morality play but a political configuration in which these governments are increasingly trapped between competing pressures.

It is inside that narrowing space that twelve Western countries have now taken, for the moment, a relatively small step.

## **The crack is not the collapse; it is the end of automatic alignment**

E1 continues to advance, the dollar remains dominant, the United States is still the central financial and military power of the Western system, and Israel retains profound political and economic relationships across Europe and North America; claiming that a revolution has already occurred would therefore simply replace one myth with another.

But **multipolarity does not require the old power to disappear**, because it begins much earlier, at the moment when other actors acquire enough alternatives to negotiate the price of alignment.

That is what we can see in EU-Mercosur, in Latin America’s search for new partners, in BRICS payment initiatives, in European defence diversification, in Canada’s strategic repositioning and even in the increasingly coercive American response, which relies more openly upon instruments of pressure precisely as allies seek alternative exits.

And perhaps that is what we are also seeing, in miniature, in the 8 September declaration.

**The real crack in the Western order is not yet a rupture with Israel or Washington, but the end of the assumption that alignment can continue indefinitely without being renegotiated, justified to voters and paid for economically.**

When a hegemonic system works smoothly, compliance appears natural; when it increasingly requires visible pressure, the question inevitably arises as to whether what we are witnessing is merely a demonstration of strength, or also evidence that the same strength no longer produces the same level of obedience.

The apparently minor detail with which we began — twelve signatures beneath a declaration concerning trade with Israeli settlements — therefore acquires a different meaning, because this may not be the story of governments that have suddenly discovered the courage to rebel, but of governments that have started, much more pragmatically, **to calculate how much it now costs them not to**.

From this point onwards, the file no longer concerns only Israel and Palestine.

It concerns **who will control the doors of the next international order**.

*AntonellaNEWS will continue to follow this trail through the *Geopolitical Radar*, watching which of the twelve governments translate declarations into enforceable rules, whether restrictions expand from goods towards finance, insurance and investment, how Washington and Tel Aviv respond, and how quickly Europe, Mercosur and the wider Global South continue building economic alternatives capable of lowering the cost of saying no.*

*If this kind of investigation helps you read geopolitics beyond the daily sequence of headlines, you can support AntonellaNEWS on Substack: *the price of two coffees a month helps protect the independent time required to follow the documents, trace the money and connect developments that are too often reported as though they had nothing to do with one another.**

### **Sources**

*Joint declaration by the foreign ministers of Canada, Denmark, Finland, France, Iceland, Ireland, Norway, Poland, Portugal, Spain, Sweden and the United Kingdom, 8 September 2026; Government of Canada, Canada-France-United Kingdom joint statement; International Court of Justice, Advisory Opinion, 19 July 2024; European Commission and Government of Brazil, EU-Mercosur agreement and provisional application from 1 May 2026; Reuters reporting from January to September 2026 on Mercosur, tariffs on Brazil, Peru, NATO, Canada-EU relations and E1; Governments of Israel and Argentina, Isaac Accords, 19 April 2026; Presidency of Argentina, Israel Allies Foundation conference, 29 June 2026; BRICS, New Delhi Declaration, 12 September 2026; IMF COFER, first quarter 2026; Bank for International Settlements, Triennial Survey 2025; YouGov EuroTrack; European Council on Foreign Relations.*