Arab Spring: EU influence at risk

So far, the Union has been little more than a timid bystander in Egypt's democratic transition. Now it is standing by and watching as the US tries to stamp its influence on post-Mubarak Egypt - a tug-of-war between Washington and Cairo which may determine the future of Europe's most vital interests in the Middle East.

The recent Scaf campaign to crack down on NGOs working to support the transition recently culminated in the indictment of 44 Egyptian and foreign employees, accused of "operating without a licence ... receiving unauthorised foreign funding ...[and] engaging in political activity."

Those indicted - among whom are 16 Americans and two Germans - have been banned from leaving the country and are to face trial in Cairo's criminal court. If convicted, they face up to five years in prison.

The motives for the witch-hunt - initiated by Egypt's minister of planning and international co-operation, Fayza Abouelnaga, one of the few holdovers from the Mubarak era - are obvious.

The conspiracy theory that foreigners are trying to destabilise the country resonates well the Egyptian public. The NGO crackdown distracts from the government's increasing lack of legitimacy - mass mobilisation is back and people are calling for Scaf heads. It is also way to intimidate reformers - in particular liberal pro-democracy activists, the main target of the crackdown, who are represented in civil society more so than in the party political landscape.

The indictments have put Egyptian-US relations on a knife-edge, and the fact that one of the indicted workers is the son of US transport secretary Ray LaHood makes matters worse.

The US could end up freezing badly-needed aid. Egypt is currently negotiating a $3.2 billion loan from the Washington-based International Monetary Fund (IMF). Non-IMF US aid ($1.6 billion annually) has already been frozen since December, pending assurances that Egypt's new rulers will not harm Israel and will support democracy.

The US aid package - $1.3 billion of which goes directly to the ruling generals' military budget - has been the backbone of the US-Egyptian security partnership since the signature of the Camp David peace accords in 1979 and of Egypt's regional security strategy in general. Now it is at serious risk.

Much of the EU's wariness of the 2011 Arab uprisings is also rooted in fears that new Islamist governments, linked to the pan-Arab Muslim Brotherhood movement, may be less friendly toward Israel. The Union's top priority in its talks with Egypt's emerging leaders is the continuation of the Egypt-Israel peace treaty.

As things stand, the EU can do little to influence the course of events.

Its sway in Egypt was always small and became even smaller with Mubarak's departure. The EU last year increased its financial assistance to the Arab world. But the numbers are still too low to give it anywhere near the leverage that the US or the IMF have over Egypt's future.

From 2007 to 2010, the EU's bilateral assistance to Egypt amounted to just €558 million. Even as EU diplomats debate what kind of conditions they should put on new aid to the region, up-and-coming political forces in several north African countries have gained in popularity by rejecting conditional aid.

It is unlikely that the US will bin the Camp David arrangement for the sake of human rights alone.

But the patron-client relationship which characterised EU and US relations with Arab countries is beginning to look out of date in the post-authoritarian Middle East. The end of the ancien regime is an opportunity for the EU to build new relations with long-term benefits both for the Union and the Arab Spring region.

It might not happen just yet. But, EU and US policy-makers must face the fact that they are entering a post-Camp-David world.

Kristina Kausch is senior fellow and research coordinator at Fride