EU Eyes Deeper Investment Ties with Syria to Foster Stability and Counter Regional Influence

The European Union is actively seeking to strengthen its investment connections with Syria, with a significant forum scheduled in Damascus next week. This initiative is part of a broader strategy aimed at promoting the country's stability and diminishing the influence of Iran and Russia, both allies of the former Assad regime. An EU official highlighted that Europe is dedicating substantial resources and funding towards Syria's reconstruction, stating, "If Syria can develop its own prosperity and security and project that to the neighbourhood, we, as the EU, as well as the broader region, have a lot to gain."

The Syria Partnership Co-ordination Forum will be co-chaired by Syrian Foreign Minister As a ad Al Shibani and EU Commissioner for the Mediterranean Dubravka Suica. The primary goal of this event is to establish coordination, laying the groundwork for a potential EU-Syria business conference in 2027. Notably, this forum will mark the return of the European Investment Bank, represented by vice-president Gelsomina Vigliotti, to Syria for the first time in 15 years. The event is also expected to be attended by representatives from EU and Arabian Gulf states, international development banks, and UN agencies. The World Bank is set to present its new START trust fund, a multi-donor initiative supporting Syria's recovery and reconstruction.

The EU severed ties with Bashar Al Assad's regime in 2011 following its severe crackdown on protests that escalated into a civil war. The ousting of Al Assad in December 2024 has created an opportunity for Syria to normalize relations globally. Neighboring Turkey and Gulf states have been quick to offer support to the country's new leadership as Russian and Iranian influence has waned. An internal document from the EU's diplomatic service, the EEAS, indicated that the bloc aims to increase its engagement with Syria to mitigate "the malign influence of Russian and other foreign actors on Syria." While Moscow's influence has decreased post-Assad, its ongoing military presence and economic leverage remain a concern, with Russia seeking to maintain access to key bases like Tartus and Hmeimim. The EEAS acknowledges that significant challenges persist, requiring accelerated progress in economic recovery, national reconciliation, and the reintegration of displaced persons and refugees.

A major hurdle for Syria's reconstruction financing is the integration of its banking sector with the West. Although Europe has been supporting the Syrian central bank's reform efforts, progress has been gradual. The first high-level EU-Syria dialogue occurred in May, with Mr Al Shibani in attendance. The EU has committed €175 million for Syria in 2024-25 and an additional €280 million for 2026-27. Concurrently, relations between Damascus and Washington have improved, with the US lifting the Caesar Act sanctions last year and rescinding Syria's state sponsor of terrorism designation in August. The Damascus forum coincides with the EU's increased regional presence and precedes a major business forum in Aqaba, Jordan, which will feature over 100 EU corporations and 300 European participants, with Jordan also seen as a potential hub for Syria's reconstruction efforts.