Israel’s hostage dilemma

This is an audio transcript of the FT News Briefing podcast episode: ‘Israel’s hostage dilemma’

Marc Filippino
Good morning from the Financial Times. Today is Wednesday, October 11th. And this is your news briefing.

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Keir Starmer is trying to win over conservative voters. Israel is trying to figure out how to get back the hostages that Hamas took. And the EU is looking into the funds it sends to Palestinian territories. I’m Marc Filippino, and here’s the news you need to start your day.

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It’s looking like next year’s general election in the UK will be Labour’s to lose. The party currently sits comfortably ahead of Conservatives in the polls, but Labour leader Keir Starmer isn’t taking anything for granted. He outlined his vision for the country at the party’s annual conference on Tuesday.

Keir Starmer clip
Today we turn the page. Answer the question, why Labour?

Marc Filippino
Joining me now from a pretty noisy press hall in Liverpool just after the speech is the FT’s political editor George Parker. Hey, George.

George Parker
Hi there, Marc.

Marc Filippino
So, George, going into the Labour party conference, Starmer was looking to answer the question that we just heard. Why Labour, meaning like, why vote for Labour? What did he have to say about that?

George Parker
Well, as you suggested in the question, he’s been a long time saying, look, the Conservative party is not fit to govern the country. They’d been in charge for 13 years. Things got worse rather than better.

Keir Starmer clip
I wanted to remind everyone that there was a time, and it wasn’t that long ago, when questions such as, “Is Britain destined for decline?” would have felt ridiculous even to ask.

George Parker
So today was an opportunity for a positive case for Labour governments. And there are two sort of principle things he was offering. The first one was sort of stability issue, the idea that a Labour government could offer security after years of economic and political turmoil, but also hope as well, I think, was the important thing he was trying to project. So he said, look, what’s been ruined can be rebuilt.

Keir Starmer clip
Wounds do heal. And ultimately, that project — their project — will crash against the spirit of working people in this country, and they are the source of my hope. 

George Parker
And also he’s promised to bulldoze, as he put it, the British planning system, which is one of the most restrictive in the world, with the intention that it would unleash the construction of factories, infrastructure, but also one and a half million homes over the lifetime of the next parliament.

Marc Filippino
It seems like there’s some sort of balancing act Starmer has to play here.

George Parker
Yeah, there is, because he needs to win over a huge number of people who voted Conservative at the last election to win a majority of the next election, which we expect next year. In fact, to win a majority of just one seat in the House of Commons, Keir Starmer would have to secure 124 gains. That’s a very large number on a bigger swing than Tony Blair achieved in that landslide victory back in 1997. So nobody here in Liverpool is taking an election victory for granted. Far from it. There’s a sort of air of cautious optimism, I think, is probably the best way of describing it.

Marc Filippino
George, with this speech, did Starmer put Prime Minister Rishi Sunak, the leader of the Conservative party, on his toes?

George Parker
Well, I think one of the reasons why people here are so quietly confident is that Rishi Sunak’s had all summer to think of a counter attack strategy to try to dig himself out of the hole he’s in at the moment. And his conference didn’t go off all that well in Manchester last week. So there’s a little sense that their opponent may not be quite as scary as they thought. I think from the Labour point of view, the way this would frame the debate going forward is trying to sort of label it like a government-in-waiting and therefore put pressure on their opponents, the Conservatives, and hope that as the election gets closer and if the opinion poll lead doesn’t narrow, the Conservative party goes into full-scale panic mode. And that will be the hope here.

Marc Filippino
George Parker’s the FT’s political editor. Thanks, George.

George Parker
Pleasure.

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Marc Filippino
The European Union is looking into whether it will keep sending developmental aid to Palestinians. Neighbourhood commissioner Oliver Varhelyi posted on social media on Monday that all payments to Palestine are immediately suspended, but Brussels backtracked on that shortly after. It raises, though, the question: what kind of aid is the European Commission sending to Palestine? Here to talk about this is our Brussels bureau chief Henry Foy. Hey, Henry.

Henry Foy
Hey, Marc.

Marc Filippino
All right, so tell me what’s been going on in recent days when it comes to aid being sent to Palestinians from the EU.

Henry Foy
So the bottom line is that there is a review going on by the commission into whether or not payments that have been already made to the Palestinian territories may have fallen into the hands of Hamas, the terrorist group that controls the Gaza Strip and that perpetrated the attack on Israel.

Marc Filippino
But there, as I said earlier, there was a miscommunication leading up to the review. What happened?

Henry Foy
So when Mr Varhelyi, the commissioner for the neighbourhood, EU’s neighbourhood — he's basically in charge of relations with states like Israel and other states around Northern Africa for the EU — announced on social media that they were suspending funding to Palestine, there was this huge backlash, both public and private, to those comments. Some member states, such as Ireland, put out a statement saying that they believed that this was against the rules, that he couldn’t do this. Six hours later we then get a statement from the commission officially, if you like a press release, saying that there wasn’t a suspension. That was just a review. However, no payments were currently foreseen. So if you like, not a de jure suspension, but a de facto one, at least. The crunch will come when a new payment is due and the review has not been completed yet, whether or not that payment goes through as to whether this is a true suspension or not.

Marc Filippino
What had been the EU’s funding strategy for Palestinians before the attack by Hamas on Saturday?

Henry Foy
So the EU is the largest external donor to the Palestinians. Between 2021-2024, they budgeted around €1.2bn, €700mn of that is allocated to developmental aid, which is things like energy projects, water projects and economic projects for job creation. The other chunk is humanitarian aid, so mainly to refugee agencies, to health, education, social services, things like that.

Marc Filippino
Henry, just out of curiosity, what would happen if the EU were to pull the plug on the funding to Palestinians?

Henry Foy
Let’s make clear here, nobody’s talking about pulling humanitarian funding. That will continue. But in the, and we should say unlikely, but I guess possible, situation where developmental funding is, is suspended or even cancelled, that would have a huge impact. It would be a really, incredibly destructive economic hit to those people, of course, at a moment when they are suffering immensely from what looks like a sustained and potentially long-running Israeli military operation.

Marc Filippino
Henry Foy is the FT’s Brussels bureau chief. Thanks, Henry.

Henry Foy
Thanks a lot, Marc.

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Marc Filippino
Hamas militants kidnapped dozens of Israelis during the surprise attack on the country. That’s created a painful dilemma for Israel. It now has basically two options to get prisoners back, both of which are pretty risky. They could do prisoner swaps or bring them back by force. I’m joined now by the FT’s James Shotter in Jerusalem. Hi, James.

James Shotter
Hi.

Marc Filippino
So what can you tell us about the hostages who were taken?

James Shotter
Well, there’s conflicting reports about precisely how many have been taken. Estimates seem to vary between 50 and 150. There have been videos that have circulated on the internet showing elderly people being kidnapped, showing children being kidnapped. And there’s also a mixture of nationalities in there. I mean, the US has come out and said that some of its nationals are among those who have been kidnapped into Gaza. The UK also has nationals who have been kidnapped, and there’s a whole host of other countries as well.

Marc Filippino
So, James, what are the pros and cons of each option that Israel has here?

James Shotter
Well, the pros of bringing them back by negotiation, if it were possible, would be that Israel wouldn’t have to put forces on the ground specifically for this, although they may do it anyway. So the risk would be lower. Bringing them back by force would obviously also bring the risk that the Israelis would inadvertently kill hostages because they don’t know where Hamas is hiding them. And Hamas has obviously got a very elaborate network of tunnels under Gaza where they could hide people. But the downside of negotiations from an Israeli perspective is that in the past they’ve had this record of trading large numbers of prisoners, Palestinian prisoners, militant prisoners, in Israeli jails for very small numbers of Israeli soldiers. I mean, there was one case where they traded 1,100 militants for three soldiers. Another where they traded 400 prisoners for a single Israeli colonel. And then some of those people who were released then gone on to commit further attacks against Israel. So there was a certain hostility, particularly on the Israeli right, to these sort of trades that could make it politically difficult to carry them out.

Marc Filippino
James, how did these hostages play in the overall conflict? I guess, what, what bigger role do they play here?

James Shotter
Well, I think the main thing is that they enormously complicate Israel’s plans for dealing with Hamas. One option that’s on the table beyond the bombardment of Gaza is for Israel to launch some sort of ground invasion because I think most military planners think that if the objective is to weaken Hamas in such a way that it’s not capable of carrying out any further attacks on Israel or even to destroy it, then soldiers have to be on the ground. But if Hamas has, you know, 100 or 150 hostages there that they can use as human shields, who could be injured anyway or killed anyway in that attack, it is much more difficult for Israel to plan and carry out such an attack.

Marc Filippino
James Shotter is the FT’s Jerusalem correspondent. Thanks, James.

James Shotter
Thanks very much.

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Marc Filippino
Before we go, the Briefing is offering a sale where you can get 50 per cent off a digital subscription to FT.com. To cash in on the offer, all you got to do is visit FT.com/briefingsale. We’ll have that link in our shownotes. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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