If Gabriel Makhlouf’s blog is anything to go by, the Central Bank of Ireland governor would much rather talk about inflation than Israeli “war” bonds.
But those bonds cannot have been far from Makhlouf’s mind as the bank faced growing condemnation for approving Israeli debt, a procedural precondition for trading such bonds in the European Union.
Israel’s military campaign in Gaza has intensified, with famine now a reality in the crowded Palestinian territory. More than 63,000 have died in the enclave in total. This led to a tidal wave of pressure on the bank as the period for its approval of a 2024 Israeli bond came to an end.
Makhlouf had refused to rescind that approval, insisting EU law required him to approve any qualifying bond prospectus. But would Central Bank approval be renewed for a new prospectus?
The answer came quickly on Monday when the governor sent a letter to Sinn Féin TD Mairéad Farrell, chairwoman of the Oireachtas finance committee.
“The Central Bank’s approval of the 2024 prospectus will expire today, 1 September, 2025. Accordingly, from 2 September, 2025, it will not be possible for the State of Israel to offer bonds under the 2024 Prospectus,” he said. As for Israel’s 2025 bond prospectus, Luxembourg would provide the approval for EU trading.
At one level, this relieves a major Makhlouf headache. But this was far from a decision of the bank to recognise the force of opposition to its Israeli debt role.
On the contrary, the bank seems to have had no actual role in the Luxembourg transfer. “It was a decision on the part of the issuer,” the bank said, referring to Israel as issuer of the disputed bonds.
If Israel asked again for Irish approval, Makhlouf statements suggest it would be granted. Still, the bank won’t go there as it does not answer hypothetical questions. That might yet be one for the committee. “I am happy to discuss this matter further with you,” Makhlouf told Farrell. Somehow, “happy” doesn’t seem like the right word.
