In Geopolitics This Week
EU Placates Hungary to Secure Financial Relief for Ukraine, US Energy Politics Threaten Delicate European Equilibrium, US Strikes Iran Proxies in Retaliation for Jordan Base Attack, and other stories.
EU Placates Hungary to Secure Financial Relief for Ukraine
The European Union approved a $54 billion financial assistance package for Ukraine after Hungary agreed to drop its objections in return for certain concessions. Hungary's Prime Minister Viktor Orbán had previously obstructed the aid package at a December EU summit, but secured future periodic reviews of spending allocations in exchange for lifting Hungary’s veto.
While the European Union had contended that the wartime urgency of Ukraine’s need for financial assistance justified applying intense pressure on reluctant member states, no EU nation itself is in a state of war with Russia. Threats of punitive financial retaliation against Hungary’s economy and sovereignty were an extreme coercive tactic, regardless of the necessities posed by Ukraine’s fiscal situation. Demonstrating internal EU unity ultimately appeared secondary for Brussels to addressing the deeper schisms and rifts of vision and purpose fueling Hungary’s obstructionism.
Unanimous consensus on the aid package was eventually reached, but only after Hungary was granted key concessions. In exchange for Budapest lifting its block aid funds to Ukraine, Viktor Orbán successfully obtained future periodic reviews on aid to Ukraine, providing potential veto influence over spending allocations going forward. At least for the moment, the EU has projected an outward image of unity successfully prevailing through this negotiated compromise deal – Ukraine seems to have secured a baseline of longer-term financial reliability, and Europe has signaled a baseline willingness to jointly sustain Ukraine going forward amid shifting political support from more traditional allies.
But the bitter internal feud by the initial threats of economic retaliation has also exposed fundamental political and cultural fissures over definitions of sovereignty that seem likely to continue hampering Europe’s aspirations for a unified purpose. While assistance for Ukraine was eventually achieved via compromise, future tranches still risk inefficient allocation as the war evolves dynamically. More broadly, the EU’s projected willingness to now assume primary budgetary responsibility for financing Ukraine also signals that Europe is willing to shoulder more direct accountability for Ukraine’s future fate going forward. However, the EU's own internal cohesion remains strained by the unresolved, endemic debates between member states over sovereignty versus integration.
US Energy Politics Threaten Delicate European Equilibrium
The United States has paused approval of several key liquefied natural gas export projects. This move risks undercutting Europe’s fragile unity if reduced export volumes fail to deter countries from reopening Gazprom pipelines. With import-reliant Germany potentially calculating wavering US liquefied natural gas output warrants re-engaging Moscow, that could critically impede US leverage against Russia regarding Ukraine issues.
The approvals pause presents potential Russian opportunities. Moscow sees prospects to increase its global LNG exports if US capacity sent to Europe declines. Russian officials are already leveraging the decision in reinitiating natural gas talks with Europe, pointing to uncertainties over US reliability. While there are rifts between the EU and the US on energy dependence, dramatic impacts on long-term energy security or strategic partnership are doubtful. Rather, existing LNG project surpluses and Europe's market fading importance indicate Russia may gain little from US policy shifts. Although Russian energy stakeholders are posturing for new deals, sanctioned energy dynamics restricting Russian exports will likely persist near-term.
The decision to pause new LNG export approvals sparked alarm from European allies deeply reliant on growing US capacity to displace Russian piped gas. Beyond Venture Global's stalled Louisiana terminal, each delayed permit erodes total planned export volumes required to confidently deter desperate countries from re-opening cheaper Gazprom supply lines. With import-dependent Germany especially at risk of wavering US LNG output, economic necessity may soon come to warrant re-engaging Moscow. This would critically impede US leverage in negotiations with Russia over resolving the Ukraine crisis. Therefore, shielding European allies from potential political pressure fueled by higher energy prices spikes remains an essential component of Washington’s efforts to to forestall possible European concessions to Russia.
While seeking to bolster European energy security, vital US policy support for supply diversification through LNG infrastructure investment still effectively means European allies are merely exchanging long-term Russian pipeline resource reliance for similar dependence on distant US terminal capacity expansion aspirations. Moreover, as intensifying US domestic political disputes increasingly threaten governmental paralysis and policy predictability, speculative calculations may gradually compel import-reliant European countries to reluctantly evaluate even potential re-engagement with Russia as at least a comparatively stable natural gas supply partnership amid heightening energy security vulnerability to further external shocks or supply disruptions from unpredictable allies.
Politically expedient for short-term electoral considerations, the snap decision to freeze long-term structural US LNG export growth risks severely complicating broader US international cooperation interests, especially with European partners. Until achieving full energy production self-sufficiency, Europe's supply diversity resilience and capacity depends heavily on consistent, coordinated support from the US and other allies.
US Strikes Iran Proxies in Retaliation for Jordan Base Attack
A drone attack at a US military base near the Jordan-Syria border killed 3 US soldiers this week. This has worsened regional stability and invited reprisal attacks from the US. However, conditions persist allowing militias to skirt accountability. Therefore, while tactical strikes may register immediate objections to assaults on US troops, hopes of de-escalating the complex crisis without uncontrolled outbreaks rests on both sides navigating respective red lines.
The web of regional relationships complicates US response options. Iran carefully cultivates yet distances itself from proxies that nurture opposition to US and Israeli policies in Iraq, Syria and elsewhere in the region. Meanwhile, the US counterterrorism footprint in Iraq and Syria lacks domestic support or a clear strategic justification, heightening risks of escalatory cycles as volatile flashpoints compete for US leadership attention. The list of options for Washington appeared few in number, with most officials supporting a position between between proportionate retaliation registering resolve and runaway tit-for-tat hard power escalation.
The US decided to first telegraph, then launch strikes in Iraq and Syria against over 85 targets. Iraq condemned the strikes as an infringement on its sovereignty, while Syria holds the position that US occupation of Syrian territory cannot continue. As the US aimed to signal resolve, the strikes likely only entrenched regional attitudes that armed militias are able to cost-efficiently threaten US and Israeli forces. The resistance cultivated by Tehran thrives on kindling provided by Israel’s military operations in Gaza and Washington's efforts to diplomatically shield them.
While tactical strikes register immediate objections to other deadly attacks on US soldiers, they cannot restore stability or mutual deterrence alone, especially if US forces are suffering from a resolve gap. With the fundamental incentives enabling Iran’s plausibly deniable escalation strategy against Western powers persisting, these strikes may have the opposite of their intended effect. Without political will addressing endemic drivers of conflict, such as violations of sovereignty or targeting breed anti-US and Israeli perspectives, setting up conditions ripe for further uncontrolled radicalization and conflict.