How might US-Europe divergence impact the Middle East?

Less economic assistance

Most importantly, the threat from Russia is encouraging nearly all European states to raise their military budgets and squeeze foreign economic assistance budgets. The Brussels-based financial research organisation Bruegel estimated in February that the stated goal of the European Union President Ursala Van der Leyen to raise military budgets in Europe to about 3.5% of gross domestic product would cost €250bn Euros annually. (For comparison, France's defence budget for 2025 is projected to be €51bn, and Germany's defence spending in 2024 reached €82bn, with a big increase planned for 2025.)

As a result, European capitals will have to cut economic assistance packages. British Prime Minister Keir Starmer told parliament in February that his government would cut foreign aid by over £13bn (about €16bn) in order to increase defence spending by the same amount.

For his part, French Defence Minister Sébastien Lecornu, in March, called for a €40bn increase in defence spending in the coming years, forcing Paris to cut foreign assistance by more than a third to €3.8bn in 2025. Germany and the Netherlands have also sharply cut their foreign assistance budgets in the past two years. These cuts come in addition to the sharp reductions in American foreign assistance.

While scaled-back economic assistance will limit Europe's ability to boost its soft power as America withdraws from the Middle East, Europe has other avenues to increase its influence. Over the past decades, Europe has relied heavily on its financial capabilities to gain influence in the region. In February 2024, the EU signed an agreement with Egypt whereby it would provide it with €7bn in aid and investment over a three-year period.

For its part, Jordan has received about €4bn from the European Union since 2011, according to its statistics, and the European Union and Jordan agreed on a €3bn economic assistance and investment package over a three-year period as well. Similarly, Lebanon has received about €3.5bn in European aid since 2011.

As European budgets become even more strained in the next several years because of greater military spending to deter Russia and domestic social programme needs that are very politically sensitive, large amounts of aid to states like Egypt, Jordan and Lebanon will be harder to justify. As Western assistance flows diminish in the Middle East and North Africa, assistance from the Gulf states, Türkiye and even China will become more important.

Of course, there is more to soft power than economic assistance. As university studies in the US become less attractive, Europe could receive foreign students to its universities, where it could build bridges with the next generation. Moreover, as US involvement in the region diminishes, European and regional states will need to coordinate and manage regional disputes and will have more space and freedom to do so as the US scales back its presence, especially in areas that do not directly involve Israel.

Syria

Syria's economic assistance needs are enormous now and for the foreseeable future. The latest World Bank estimate in 2022 estimated reconstruction would cost at least $250bn (at least €230bn). The cost now will be greater still. At the ninth Brussels donor-state conference for Syria in March 2025, European states pledged about €5.8bn, more or less the same amount as last year's conference.

Maintaining this large assistance level despite budget reductions demonstrates the priority Europe gives Syria. Key European governments and the EU aim to help stabilise and rebuild Syria, in part to forestall another wave of Syrian refugees to Europe.

In February, the EU and UK lifted sanctions on specific Syrian companies working in the energy and transport sectors and on five Syrian commercial banks to help state companies and the private sector. In March, the German foreign minister visited Damascus, where he rolled out a new €300mn assistance package to help reconstruction.

Trump's interest in Syria is minimal, and after the fall of the Assad regime last December, he tweeted that "Syria is not America's problem." Many analysts in Washington predict the Trump administration will withdraw American forces in Eastern Syria in the next few years as the US pivots to Asia.

In contrast to the Europeans, Trump has not lifted sanctions beyond the small steps the Biden administration adopted in the middle of January, and it declined to pledge any new aid to Syria at the Brussels conference. A senior American official there said that the administration was sceptical about the Syrian government's "violent extremist" past and its human rights record.

And while Germany has reopened its embassy in Damascus with a small diplomatic staff, the Trump administration hasn't even agreed to sit with the new Syrian government to discuss relations.

Interestingly, Trump's special envoy for the Middle East, Steve Witkoff, told an American-Jewish organisation in February that eventually, Syria and Lebanon both could sign normalisation agreements with Israel. Meanwhile, well-informed sources in Washington have told me that the Trump administration might condition sanctions relief and improved relations with Syria on signing the Abraham Accords.

For their part, European states have made no similar links to Syrian normalisation with Israel, although they would not object if Damascus moves in that direction.

Gaza

European attention regarding Israel is more focused on Gaza and rebuilding it after the war ends. Europeans rejected Trump's idea of expelling Palestinians from Gaza and the US 'owning' it and rebuilding it into "The Riviera of the Middle East" with private investors. Governments such as France, Germany and Italy emphasised that the Trump plan flouts international law and impedes efforts to reach a two-state solution.

After criticising the Trump plan in February, the foreign ministers of Germany, France, Italy and the United Kingdom backed the Egyptian plan adopted by Arab leaders in March. If the plan moves forward, European states and the EU will contribute financially, as European policy is to stabilise Gaza and eventually bring it under the control of the Palestinian Authority.

European politics favour reconstruction aid for Gaza, but budget limitations will compel the Europeans to prioritise between Syria, Egypt, Jordan, Lebanon and Gaza. Individual European states may determine their own priorities. Some countries might target economic assistance to countries where the aid might help reduce migration flows into Europe, while others might make decisions based on domestic forces and pressures.

The US is highly unlikely to contribute financially to any Gaza reconstruction efforts as neither Democrats nor Republicans would be in favour. Gulf states would thus have to fork over the bulk of the $53bn in reconstruction aid to rebuild Gaza under the Egyptian plan.

Israel

European attitudes towards Israel will not change directly because of troubled relations between Europe and the US, but points of friction between Europe and Israel have already begun to emerge. Each European country has its own bilateral relationship with Israel, and history, domestic politics, and strategic priorities determine those individual relations. Spain and Ireland, farther away from the Levant, are especially critical of Israel, for example.

It is worth noting that top political leaders of both parties in Washington are gradually walking away from even public support for the two-state solution. In the current political environment, Washington would likely recognise Israeli annexation of parts of Gaza and the West Bank.

European capitals, by contrast, are strongly attached to the two-state solution—at least publicly—and they would criticise Israeli annexation. In some parts of Europe, pressure is growing to retaliate against Israel economically.

Meanwhile, in the medium-term, as Europe increases production of high-quality military equipment and technology, it will seek to sell some of it to states in the Middle East in order to achieve economies of scale on production lines. (Washington sells the F-35 fighter to some foreign states for this reason.)

European financial needs, especially later in this decade, will make some European capitals less sympathetic to objections from Israel and the US about weapons sales to Arab states, which could likely be a point of contention in the future.