Opinion
The EU Freezes and “Appropriates” Russian Assets Indefinitely: Trigger a Global Trust Crisis
On December 12, the Council of the European Union (EU) passed a highly controversial resolution by an “overwhelming majority”: announcing the indefinite freezing of approximately 300 billion euros in overseas assets of the Russian central bank, and for the first time proposing—through a so-called “international law workaround mechanism”—to transfer part of the assets to Ukraine for use. Russian President Putin said during the “annual review” event held in Moscow on the 19th that the attempt to confiscate Russia’s assets in Europe is “not even theft, but robbery.”
This move is seen by the outside world as a major escalation in the EU’s history of sanctions against Russia, and has been criticized as crossing the “red line” of international finance and international law. After the resolution was announced, Russia quickly launched strong countermeasures, suspending transit transportation of natural gas to the EU, and placing 12 EU countries on a “special unfriendly countries list.” The contest over massive sovereign assets is rapidly extending from the military battlefield of the Russia–Ukraine conflict into the global financial system, and its continuously expanding spillover effects are profoundly reshaping the international financial order, while prompting many countries to be highly vigilant about the issue of “asset security sovereignty.”
Sanctions Escalate Again: From “Freezing” to “Appropriation,” the EU Touches the Financial Bottom Line
The key breakthrough of this Council resolution lies in a fundamental change in the method of disposing of Russian central bank assets—upgrading from “freezing” to “targeted appropriation.” According to the disclosed text of the resolution, the EU plans to advance the relevant operations in two steps. In the first step, targeting roughly 200 billion euros in cash-type assets of the Russian central bank held within EU member states, the EU will, through a so-called “custody account restructuring” method, convert them into “reconstruction loans” provided to Ukraine, to be used for postwar infrastructure repairs and fiscal expenditures. In the second step, it will implement a “mandatory transfer” of the investment income from the remaining roughly 100 billion euros in assets, and clearly stipulate that these proceeds will be earmarked for Ukraine’s procurement of military equipment and battlefield medical support.
In order to avoid controversy at the level of international law as much as possible, the EU has carried out careful legal design. On the one hand, the EU cites Article 51 of the United Nations Charter regarding the “right of self-defense,” defining the appropriation of Russian assets as “supporting Ukraine’s exercise of the right of self-defense”; on the other hand, the EU has also joined with allies such as Canada and Japan to promote the establishment of a so-called “International Asset Assistance Alliance,” attempting to dilute the legitimacy controversies of unilateral sanctions and asset disposal under the cloak of “multilateral consensus.”
According to data, among the 300 billion euros in assets that have been frozen and are intended to be appropriated, Germany holds about 78 billion euros, France about 52 billion euros, and Italy about 43 billion euros, making them the main implementing countries of the plan and therefore facing higher political and economic risks. In the end, the EU bypassed veto power through a “special voting mechanism,” and the resolution was passed with the result of 25 countries in support, 3 countries against, and 1 country abstaining.
Cracks Within the EU Emerge: Orbán Warns of a Dual Backlash in Finance and Law
On December 13, Hungarian Prime Minister Orbán again publicly stated his position on this issue, bluntly saying that if the EU insists on using Russia’s frozen assets, it will trigger “extremely serious problems.” He pointed out that, on the one hand, this move will significantly reduce global trust in Europe’s financial custody system; on the other hand, the Russian central bank has filed a lawsuit on the relevant issue against Euroclear, the European clearinghouse that holds a large amount of Russia’s frozen assets, which means that Euroclear may face enormous repayment pressure in the future.
Orbán particularly emphasized that because the amount involved is huge, the economy of Belgium, where Euroclear is located, may even face the risk of “collapse.” As an important link in the eurozone financial system, once Euroclear suffers a systemic shock, its impact will quickly transmit to the entire eurozone financial market, thereby threatening the EU’s economic stability and monetary order.
Orbán’s remarks reflect the deep divisions within the EU over how to handle Russia’s frozen assets. Using the central bank assets of a sovereign state may not only trigger complex and prolonged legal disputes, but may also shake Europe’s international image as a safe place to store assets.
Russia’s Strong Countermeasures: Energy “Cutoff” Combined with Reciprocal Asset Freezing
In response to the EU’s “asset appropriation” plan, Russia swiftly launched multi-layered countermeasures. On December 13, Russian President Vladimir Putin signed a presidential decree announcing the immediate suspension of natural gas deliveries to the EU via the “Yamal–Europe” pipeline. This pipeline previously accounted for about 15% of the EU’s natural gas supply, and its shutdown is regarded as a critical blow directly targeting the EU’s energy security.
At the same time, Russia placed Germany, France, Italy, and 12 other countries that support asset appropriation on a “special unfriendly countries list,” imposing comprehensive trade embargoes on enterprises from those countries and prohibiting cooperation in key sectors such as energy, minerals, and the military-industrial complex.
Even more deterrent, Russia announced that it would reciprocally freeze EU assets in Russia. The Russian Ministry of Foreign Affairs disclosed that EU enterprises hold cumulative assets in Russia exceeding 450 billion euros, covering multiple sectors including energy projects, manufacturing plants, and financial institutions. Large corporations such as Germany’s Siemens, France’s Total, and Italy’s ENI Group all face the risk of having their assets in Russia frozen. Russian Minister of Economic Development Reshetnikov stated clearly: “For every 1 euro of Russian assets appropriated by the EU, Russia will freeze 1.5 euros of EU assets in Russia. This is an unshakable principle of reciprocity.”
In addition, Russia has accelerated the process of “de-dollarization.” The Russian central bank announced that it would reduce the proportion of euros in its foreign exchange reserves from 12% to zero, converting them entirely into renminbi, rubles, and gold. It will also expand local-currency settlement with countries such as China and India, requiring that the proportion of local-currency settlement in energy export trade be no less than 80%. Analysts point out that the dual countermeasures of energy supply cuts and asset freezing will inevitably exacerbate the EU’s energy crisis and inflationary pressures. At present, the EU’s natural gas reserves can only last until March 2026, and the cutoff of Russian gas may lead to industrial shutdowns in some European countries during winter.
European Clearing System Under Pressure, Global Financial Risk Spillovers Accelerate
Of the approximately 300 billion euros in Russian foreign exchange reserves frozen by the EU, about two-thirds are concentrated in European clearing institutions, mainly including Belgium’s Euroclear and Germany’s Clearstream. For a long time, these institutions have existed as international custodians with an image of being “neutral, secure, and non-politicized,” serving as critical infrastructure for global sovereign assets and cross-border capital flows. However, the EU’s push for the “targeted appropriation” of Russian central bank assets has effectively broken this long-established implicit consensus, sending a highly disruptive signal to global markets—that even sovereign central bank reserve assets may be illegally frozen and appropriated due to geopolitical maneuvering.
This signal is rapidly eroding the trust foundation of the global financial system and forcing emerging market countries to reassess the security of their foreign exchange reserves. Once the credibility of the European clearing system is substantially weakened, not only may Russia-related funds accelerate their withdrawal, but countries long subject to sanctions such as Iran and Venezuela, as well as ordinary multinational corporations and private investors, may also initiate larger-scale asset transfers out of risk aversion. The Credit Suisse crisis has already demonstrated that once the trust foundation of Europe’s financial system suffers a systemic shock, the cost of repair will be extremely high.
At a broader international level, the EU’s decision has been described by many in the financial community as “opening Pandora’s box.” IMF Managing Director Kristalina Georgieva publicly warned that the arbitrary appropriation of other countries’ central bank assets would undermine the core rules on which the global financial system operates.
At the same time, the EU hopes to provide Ukraine with a stable source of funding through asset appropriation, but the actual effect is not optimistic. Analysts note that due to complex legal procedures and cross-border coordination, the amount of funds that can actually be delivered may be less than 100 billion euros, and would need to be transferred in stages over three to five years, making it difficult to address Ukraine’s urgent needs in military equipment and fiscal support. By contrast, Russia’s countermeasures in energy and assets are, in turn, weakening the EU’s own capacity to support Ukraine. Persistently high energy prices have increased economic and livelihood pressures within the EU, and public support for continued assistance to Ukraine has fallen from 65% in 2023 to 41% in 2025. Governments in many countries are finding their policy space between “external assistance” and “domestic stability” increasingly constrained.
Legal risks are also steadily accumulating. The Russian central bank has already filed lawsuits against Euroclear in European courts based on the Vienna Convention on Diplomatic Relations and multiple bilateral investment treaties. Many international law experts point out that although the EU attempts to reduce its own liability through special legislation, if the disputes enter the WTO mechanism or the Permanent Court of Arbitration in The Hague, the EU’s chances of prevailing are not optimistic.
As the core hub of Europe’s financial infrastructure, Brussels is facing increasingly prominent systemic risk concerns. Euroclear processes approximately 5 trillion euros in cross-border payments daily. If a liquidity crisis were to emerge due to litigation or compensation pressure, the shock would rapidly spread to the eurozone’s bond, foreign exchange, and banking systems. The compensation claims proposed by Russia alone exceed 200 billion euros. About 8% of Belgium’s GDP directly depends on the normal operation of this institution, and the likelihood that the government will be forced to inject capital for rescue is significantly increasing. If a bailout is initiated, Belgium’s fiscal deficit ratio may breach the red line set by the EU’s Stability and Growth Pact, further intensifying domestic political and regional tensions.
From a longer-term perspective, if the neutrality and security of the European clearing system are fundamentally questioned, it may trigger severe volatility in the eurozone bond market in the short term, and in the long term may prompt large asset management institutions to reassess their European presence and shift part of their core operations to New York or Singapore. The result would not only be changes in capital flows, but also a potential decline in Europe’s position within the global financial system.
Li Zhengdong, Associate Research Fellow, Institute for Central and Eastern European Economic and Trade Cooperation, Ningbo University
Tao Jing, Assistant Research Fellow, Institute for Central and Eastern European Economic and Trade Cooperation, Ningbo University; Lecturer, School of Business
Ma Xiaolin, Specially Appointed Research Fellow, Institute for Central and Eastern European Economic and Trade Cooperation, Ningbo University; Bao Yugang Chair Professor; Professor at Zhejiang International Studies University; Director of the Institute for Mediterranean Studies
Opinion
Macroeconomic consequences of asymmetric UAV attacks in Russia
Today, the nature of asymmetric threats is undergoing a profound transformation, with their focus shifting increasingly toward economic centers. By mid-2026, the nature of asymmetric warfare within the borders of the Russian Federation entered a qualitatively new and critical phase.
An analysis of the Ukrainian unmanned aerial vehicle (UAV) strikes carried out in July 2026 reveals a deliberate shift in targeting. Moving beyond military installations and fuel-energy infrastructure, these attacks directly targeted civilian logistics networks and critical nodes of the macroeconomic infrastructure.
The primary objective of this strategic shift is to deplete the country’s internal resources, induce insurmountable disruptions in supply chains, and exert intense psychological pressure on the civilian population.
Large-scale, coordinated strikes on the distribution centers of Wildberries—Russia’s largest e-commerce platform and part of the RVB joint venture (formed by the 2024 merger of Wildberries and Russ)—became the symbol of this new phase of home-front vulnerability. The geographic scope of these attacks, spanning an unprecedented area from the Northwestern Federal District to Southern Russia and Crimea, exposed critical gaps in national industrial risk insurance mechanisms. Furthermore, this situation sparked severe legal disputes between platform economy giants and small businesses, compelling immediate intervention from both corporate executives and senior state officials.
Tracing the multi-layered consequences of the kinetic impacts resulting from these July attacks on the state’s digital and physical economy will shape the new architecture of civilian sector security.
The zenith of the logistical terror waged by Ukraine was recorded on the night of July 24, 2026, marking the most technically complex UAV attack inflicted on Russian Federation territory since the beginning of the year. According to data from the Ministry of Defense of the Russian Federation, domestic air defense systems detected and destroyed 571 fixed-wing Ukrainian UAVs that night.
Two points have become exceptionally critical here: saturating radar fields and the military “swarm” effect. In short, this event is the clearest indication that the enemy has transitioned to a tactic of overwhelming radar systems. At the same time, the “swarm” effect generated across a vast geographic expanse aims to rapidly deplete the ammunition of anti-aircraft missile systems and expose air defense positions deep behind the front lines.
The breadth of the targeted geography attests to the unprecedented scale of the operation. UAVs were neutralized over the Belgorod, Bryansk, Kaluga, Kursk, Leningrad, Novgorod, Oryol, Pskov, Ryazan, Smolensk, Tver, Tula, and Vladimir regions, as well as over Moscow, Krasnodar, the Republic of Crimea, and the waters of the Azov and Black Seas.
Such a dense dispersion of targets across a vast territory points to an attempt to paralyze transportation and logistics arteries within Russia’s European landmass.
In parallel with the mass deployment of UAVs, missile strikes were also conducted against civilian industrial enterprises. During the same period, a missile attack on a local enterprise in the Fileyka district of Kirov resulted in outright catastrophe, leaving 6 people dead and 32 employees injured with varying degrees of severity.
Following the incident, Regional Governor Aleksandr Sokolov stated that the situation required not only the evacuation of the wounded, but also large-scale interventions such as restoring water and power supplies and auditing the security of neighboring settlements. This combined approach—employing inexpensive kamikaze drones to degrade air defenses followed immediately by missile strikes on unprotected industrial zones—presents an entirely new threat paradigm for the civilian economy.
Systematic and sequential attacks directed at the facilities of a single commercial entity completely eliminate the possibility of coincidence. The strategic, macroeconomic, and psychological factors turning civilian commercial warehouses into critical vulnerabilities for an entire state rest upon four pillars:
- Role as the central circulatory system of domestic trade: Wildberries plays a critical role in the architecture of the modern Russian economy, connecting millions of consumers with tens of thousands of SMEs. Damage to distribution centers severe supply chains, triggering localized shortages of essential consumer goods and regional inflationary spikes. The primary goal is to destabilize the domestic market and create an artificial supply vacuum.
- Immense facility footprints and defense complexity: Spanning hundreds of thousands of square meters across the nation, these hangars constitute massive targets with high radar contrast. Unlike military bases, these commercial warehouses cannot possess their own air defense systems; placing every such facility under an air defense umbrella is physically impossible without compromising frontline systems.
- Social and psychological impact: In the eyes of the public, logistics centers symbolize daily economic stability. Black plumes of smoke visible from miles away, massive fires, and civilian casualties represent a hybrid terror tactic designed to transport an atmosphere of fear deep into peaceful cities and shake the internal socio-political climate.
- Magnified radius of economic impact: Inventory consumed by flames in these warehouses generally consists of stock purchased by merchants on credit. The destruction of commodity inventories holds the potential to cause mass vendor bankruptcies, bank loan defaults, and cascading layoffs across small businesses.
The events of July 2026 mark an irreversible shift in the threat landscape facing Russian commerce and macroeconomics. Attacks directed at Wildberries hubs in regions such as St. Petersburg, Moscow, and Tambov exposed the utter vulnerability of civilian logistics infrastructure.
Deploying relatively inexpensive unmanned aerial vehicles, the enemy is capable of inflicting tens of billions of rubles in direct damage, paralyzing the supply of essential goods, and triggering an acute social crisis in which hundreds of thousands of entrepreneurs face the threat of bankruptcy. According to Russian experts, the total cost of a single fire—similar to the Kotovsk incident on July 18—can range between 50 and 100 billion Rubles ($630 million – $1.2 billion USD).
Despite its massive capital reserves, corporate business was caught unprepared for military threats. The medium-term survival of the e-commerce economy depends on the state and the private sector uniting to engineer unprecedented systemic solutions. Establishing compensation funds and introducing mandatory risk-distribution mechanisms are critical steps that must be taken.
Logistics hubs will remain open targets unless a “state program for subsidized reinsurance of military risks” is established for the critical nodes of the civilian economy. In the future, it will not suffice for large enterprises merely to pour capital into the physical protection of infrastructure; they must also deeply decentralize their logistics networks to prevent the concentration of goods and capital at single points of failure.
Opinion
Egypt Under Fire: What Does the Damietta Strike Mean for Global Energy Markets?
Dr. Ahmed Moustafa, Director & Founder, Asia Center for Studies & Translation, Egypt
For the first time since successive waves of escalation between Washington and Tehran began in recent months, an Egyptian liquefied natural gas (LNG) export facility has become a direct target.
In the early hours of Wednesday, 29 July 2026, at least one drone struck the floating storage unit Energos Winter, owned and operated by a U.S. company and sailing under the Marshall Islands flag, while it was moored at the Mediterranean port of Damietta. The impact ignited a fire that spread to a neighboring LNG carrier, GasLog Salem. Egyptian authorities confirmed that the blaze was brought under control without any reported casualties, while no group had claimed responsibility for the attack at the time of writing.

A Broader Context That Cannot Be Ignored
The incident did not occur in a vacuum. It came only hours after the United States Central Command (CENTCOM) announced that it had conducted joint strikes with Saudi forces targeting armed factions in Iraq accused of launching drone attacks against Saudi oil facilities. Tehran responded by warning against a “miscalculation,” at a time when the Middle East is still grappling with the repercussions of an earlier round of escalation that erupted on 8 July, when U.S. forces carried out strikes inside Iranian territory following an attack on a commercial vessel in the Strait of Hormuz. Iran retaliated with attacks targeting U.S. military bases in Bahrain, Jordan, Qatar, Kuwait, the United Arab Emirates, and the Sultanate of Oman.
Against this tense backdrop, Damietta appears to represent yet another link in the chain of regional escalation—but an exceptional one. For decades, Egypt has sought to keep itself removed from direct military polarization in the region, unlike several Gulf states that have increasingly become arenas of open confrontation.
At the same time, this interpretation does not entirely rule out the possibility of an indirect Israeli role, driven by hostility toward Egypt’s growing diplomatic influence in the Palestinian and Gaza files. Cairo has remained committed to advancing the two-state solution and to implementing the second and third phases of the peace roadmap agreed upon following the Sharm El-Sheikh Peace Summit last October. The Israeli government, led by Benjamin Netanyahu, has sought to obstruct these efforts. Netanyahu, who is the subject of arrest warrants issued by the International Criminal Court, is widely accused of bearing responsibility for committing genocide that, according to Palestinian authorities, have resulted in the deaths of approximately 73,000 Palestinian civilians since 7 October 2023.
Why Egypt?
Over the past two years, Egypt has steadily strengthened its position as a regional hub for liquefying and re-exporting natural gas. This growing role has been supported by its two LNG plants at Idku and Damietta, in addition to a network of pipelines linking the country with Israel and Cyprus.
This infrastructure—unmatched elsewhere in the Eastern Mediterranean in terms of combined liquefaction capacity and direct access to European and global markets—has transformed Damietta and Idku into critical gateways for Eastern Mediterranean gas, including increasing volumes of Israeli/Stolen Palestinian natural gas liquefied and re-exported through Egyptian facilities.
According to local reports, the Energos Winter alone was supplying approximately 450 million cubic feet of gas per day to Egypt’s national grid and was preparing to receive four additional cargoes during August.
This expanding role gives any attack on Egypt’s gas infrastructure significance far beyond the immediate incident itself. It threatens not only Egypt’s domestic energy supplies but also a supply chain upon which Europe has increasingly relied as part of its strategy to diversify away from Russian natural gas.
Who Was Behind the Attack? Open Scenarios
At the time of writing, no organization had officially claimed responsibility, leaving several possible interpretations.
The first scenario cautions against prematurely attributing responsibility to Iran or its regional allies. It argues that the ambiguity surrounding the incident—and the absence of any claim of responsibility—may itself be deliberate, allowing whichever actor carried out the attack to undermine Egyptian stability without incurring immediate political costs.
This possibility includes actors competing over Eastern Mediterranean energy routes, as well as local or transnational groups pursuing agendas unrelated to the U.S.-Iran confrontation. Egyptian officials themselves have adopted a notably cautious approach. Egypt’s Minister of Information warned against “rushing to accuse any party,” while a former official suggested that “certain actors are seeking to drag Egypt into the conflict,” implying that the attack may have been designed precisely to draw Cairo into a confrontation it has consistently sought to avoid.
A second scenario, Israeli Involvement or the Involvement of Israel’s Allies
This, in itself, remains a serious hypothesis that is reportedly being discussed in undisclosed investigative circles. The prevailing analyses, supported by pro-Israeli and pro-American narratives, have largely centered on suspicions directed at Iran or Iran-aligned actors within the context of the ongoing conflict, rather than at Tel Aviv. This is partly because Israel maintains an energy partnership with Egypt, making any attack on an Egyptian export terminal potentially detrimental to its own natural gas interests.
Nevertheless, this hypothesis—like all others—must ultimately be assessed in light of the findings of the official investigations, which are still underway. It is worth recalling, however, that repeated warnings have been voiced regarding the visits of Israeli Prime Minister Benjamin Netanyahu to Washington, as such visits have often been followed by heightened regional instability, as was argued after developments last December. According to this line of analysis, Netanyahu seeks to prolong the conflict with Iran in order to strengthen his domestic political position, secure his continuation in office, and advance Israel’s long-term strategic objective of neutralizing Iran and carrying out “Greater Israel.”
Within this framework, some analysts argue that there are broader efforts to weaken both Egypt and Türkey. They cite remarks attributed to a former Mossad operative during appearances on Israeli television, alleging that such a strategy would also serve to divert international attention away from the Gaza file and the question of Palestinian statehood—an issue on which Egypt has intensified its diplomatic efforts in recent days. According to this interpretation, creating indirect pressure on Egypt—the region’s most stable and secure state—could be viewed as a means of drawing Cairo into a wider regional confrontation.
A third scenario links the incident directly to the broader U.S.-Iran escalation. According to the article, The New York Times, citing two Iranian sources, reported that the attack may have been intended as a signal that global shipping and energy supplies could face deeper disruptions should Tehran or its allies choose to escalate further. The sources, however, did not identify the perpetrators or specify the launch point of the drone.
The Messages Behind the Attack
Regardless of who carried out the operation, the choice of target sends several important signals. An attack on what the article describes as the first American-owned energy asset on Egyptian soil would convey a message to Washington that not only its military installations in the Gulf, but also its economic footprint across the region, has become increasingly vulnerable.
For Egypt, which has consistently pursued a policy of strategic restraint and regional neutrality, the incident serves as a reminder that its geographic position—adjacent to some of the world’s most important energy and maritime corridors—no longer guarantees insulation from the conflicts unfolding around it.
For global markets, the attack suggests that the geographic scope of potential disruption is expanding beyond the Strait of Hormuz and the Arabian Gulf into the Eastern Mediterranean, increasing insurance premiums for shipping and critical energy infrastructure in a region long regarded as comparatively secure.
Egypt’s Official Response
The Egyptian government handled the incident with considerable caution and procedural professionalism, treating it primarily as a crisis-management operation rather than a political event.
The Cabinet confirmed that the fire had been caused by a drone attack without attributing responsibility to any specific party, emphasizing that investigations were continuing “to take all necessary measures to safeguard Egypt’s interests and national security.”
Prime Minister Mostafa Madbouly described the response as a test of the state’s crisis-management capabilities, praising emergency teams for successfully moving the burning vessels away from the port, thereby preventing what could have become a far larger disaster.
President Abdel Fattah El-Sisi addressed the incident publicly for the first time during a telephone conversation with Spanish Prime Minister Pedro Sánchez. During the call, he confirmed that the competent authorities were conducting a comprehensive investigation, warned of the dangers posed by the escalating regional situation, and stressed the importance of cooperation between Egypt and the international community to contain the crisis while adhering to peaceful solutions.
This measured diplomatic approach—avoiding direct accusations while emphasizing de-escalation—reflects Cairo’s determination not to be drawn into a broader regional confrontation despite having come under direct attack on its own territory.
Several Gulf states also expressed their full solidarity with Egypt and voiced support for its efforts to safeguard its national security and sovereignty.
The Impact on Global Energy Markets
The Damietta incident occurred at a time when global energy markets were already under considerable strain. Brent crude had been hovering around US$90 per barrel following the escalation of 8 July, while the European Title Transfer Facility (TTF) benchmark for natural gas had climbed above US$700 per 1,000 cubic meters for the first time since March.
Any additional disruption affecting an Egyptian LNG export terminal risks reinforcing this upward trend. Europe has increasingly relied on Egyptian liquefied natural gas as part of its broader strategy to diversify supplies away from Russian pipeline gas. Consequently, even a temporary interruption to Egypt’s export infrastructure could heighten market concerns over supply security.
The incident also adds to the geopolitical risk premium already factored into insurance costs for vessels operating in the Eastern Mediterranean. Higher perceived risks could translate into increased shipping and insurance costs for LNG carriers throughout the region, even if subsequent investigations conclude that the attack was an isolated event unlikely to be repeated.
What Should Be Done to Prevent Similar Incidents?
First, Egypt should further strengthen its short-range air defense capabilities and counter-drone systems around strategic energy installations along its Mediterranean coastline. This includes deploying advanced early-warning radar networks and cost-effective interception systems capable of neutralizing small unmanned aerial vehicles before they reach critical infrastructure.
Second, broader regional intelligence-sharing mechanisms should be expanded among Egypt and neighboring states—including Cyprus, Greece, and Türkiye—in recognition of the increasingly interconnected nature of Eastern Mediterranean gas infrastructure and the shared strategic importance of safeguarding regional energy corridors.
Third, given that the targeted floating storage unit is owned by a U.S. company, Washington should contribute to financing and modernizing the protection of such critical infrastructure rather than limiting its response to statements indicating that it is merely “monitoring the situation,” as the article characterizes the U.S. reaction.
Finally—and perhaps most importantly—reducing the broader cycle of regional escalation between Washington and Tehran remains the only sustainable guarantee against similar incidents in the future. Any purely technical or localized security measures can mitigate immediate risks but cannot eliminate them so long as the underlying geopolitical drivers of confrontation remain unresolved.
Conclusion
The Damietta incident serves as a stark reminder that geographic neutrality alone is no longer sufficient to shield a country that has become a pivotal node in the global energy network.
References:
1- https://www.bbc.com/news/articles/c39ez3klwmro
4- https://www.nytimes.com/2026/07/29/world/middleeast/ships-drone-strike-egypt.html
Opinion
Rising populist parties in Europe and liberalism
Leon Trotsky, one of the foremost leaders of the October Revolution, defined fascism as the totalitarian organization of society by monopoly capital. Magnates of large-scale monopoly capital are acutely aware that their profits cannot be safeguarded in the absence of authoritarian political power. Thus, fascism finds its bedrock of support among capitalist forces, the grand bourgeoisie, monopoly capital circles, and major landowners. We are all too familiar with the calamities fascism wrought upon the world in the era preceding the Second World War.
The post–World War II era is often commemorated as the golden age of capitalism—a period characterized by robust growth rates and low unemployment. Real wages climbed, social rights expanded, demands for a welfare state remained vibrant, and the pursuit of a social state yielded tangible results. This era ultimately met its demise in the 1970s, undone by shifts in the regime of accumulation and structural economic crises.
Today, across Europe, political parties that could virtually be characterized as the direct successors to pre-WWII fascist movements are consolidating their electoral gains. Germany, France, and Italy serve as quintessential examples. These parties weaponize poverty, unemployment, and anti-foreigner, anti-immigrant, anti-Muslim, and anti-Middle Eastern sentiments, while capitalizing on the incompetence of traditional center-right and center-left parties and taking a deeply Eurosceptic, critical stance toward the European Union. They employ caustic rhetoric against the political elites who have dominated governance for decades. Receiving endorsement from both US President Trump and Russian leader Putin, they draw substantial support simultaneously from working-class constituencies—traditionally the bedrock of the left—and from grand capital circles. While monopoly capital quietly pats these populist movements on the back, it simultaneously winks at liberal-democratic and increasingly indistinguishable social-democratic parties that champion unbridled capitalism and aggressive liberalism. Beyond France and Germany, examples abound from Italy to the United Kingdom…
The interests of grand capital, which back populist regimes and advocate authoritarian governance, also champion localization. For the erosion of the national, the public, and the collective—alongside the attenuation of the central state and the elevation of the local—works decisively to the advantage of big capital.
Why?
Because of this:
Under liberalism, the state does not regulate the market; rather, the market regulates, directs, and subdues both the state and society. In a liberal order, the state is expected to act on behalf of capital and in favor of the market—intervening in politics, society, and the law, and enacting statutory frameworks strictly to this end. The state is tasked with engineering legal and institutional arrangements for the market’s account and benefit. Society is reduced to a market-society, wherein the citizen is reimagined as a consumer, a client, and an entrepreneur. Since competition is elevated as the supreme imperative, citizens themselves must become entrepreneurial and competitive—a posture the state actively promotes and incentivizes.
According to liberals, the state bears no obligation to shield its citizens from the pitiless mechanics of the market or the ferocity of unchecked capitalism. On the contrary, the state demands and encourages that citizens establish themselves as entrepreneurial actors within the market arena. Consequently, the state aligns itself with capital, operating at its beck and call. Hence, liberalism harbors an innate preference for unorganized, non-unionized, cheap labor. Wages are suppressed; agricultural subsidies are gutted to a minimum; and strikes are banned on the flimsiest of pretexts.
Because liberalism insists that the state be sculpted, organized, and driven according to market demands—allowing the market to command and direct the state—the liberal vision of the nexus between politics and economics, as well as politics and law, is deeply fractured. In their worldview, law must operate exclusively to the advantage of capital, acting as the vigilant sentinel for the inviolability of property rights. It must dismantle every obstacle standing in the way of free trade, unbridled competition, and the free market, while swiftly and severely penalizing any force that dares to impede them. To conform to the expectations and demands of capital: this is the primary imperative required of the law.
In sum, through its championing of identity politics, its reduction of the citizen to a mere client, and its liquidation of the state’s social character in order to place public power at the disposal of capital, liberalism stands fundamentally opposed to the social, the public, and the national. This is a truth that must be firmly impressed upon left-liberals, nationalist-liberals, and conservative-liberals alike.
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