Kathmandu— Luxembourg has decided not to renew its authorization for the issuance of Israel bonds, allowing the bond prospectus to expire on Monday. This move leaves Israel with an uncertain future regarding its ability to borrow from European investors. The decision comes amid ongoing pressure over Israel's military operations in Gaza and other regions.

Background on Israel Bonds

Israel bonds are debt securities issued by the State of Israel through the Development Corporation for Israel (DCI). These bonds represent loans from investors to the Israeli government, with proceeds forming part of the government’s overall financing. This includes funding defense and military spending.

Luxembourg's Role

As a non-EU member state, Luxembourg acts as a guarantor for EU investors by approving the bond prospectus under European rules. Previously, Ireland held this role until it decided not to renew its approval in September 2023 due to pressure over Israel’s military operations.

Impact on Future Issuance

With Luxembourg no longer approving the prospectus, Israel will need another EU country to take over if it wants to continue issuing bonds within European markets. Currently, it remains unclear which country might be willing to do so. However, Israel still has access to other global markets, particularly in the United States.

Amnesty International's Stance

Amnesty International has called on Luxembourg and all EU member states to stop selling Israeli bonds, arguing that such sales risk complicity in Israel’s ongoing military operations. Steve Cockburn, Amnesty International’s regional director for Europe, stated that these bonds help finance what they describe as 'genocide against Palestinians'.

(With inputs from Al Jazeera)

Originally published on abcnews.com.np.