A significant development in international relations is the coordinated decision by the EU and US to lift economic sanctions on Syria, effective June 1, 2025, as reported by SP Global’s Country Risk Month Ahead: June 2025 . This follows US President Donald Trump’s announcement on May 14, 2025, to remove US sanctions, prompting the EU to vote on May 20, 2025, to lift all economic sanctions. The EU had previously eased restrictions on Syrian energy and banking sectors in February 2025, setting the stage for this move.
The decision aims to facilitate aid and investment for Syria’s reconstruction after years of civil war, with the EU pledging €5.8 billion over the next two years for recovery and reconstruction efforts. However, the deployment of these funds is contingent on US congressional approval to lift remaining US sanctions, which requires multiple sanctions packages to be addressed. Targeted sanctions against individuals from the former Assad government for human rights violations will remain, with the EU monitoring the Syrian Transitional Government’s (STG) use of funds, counter-terrorism efforts, and treatment of minorities for continued relief.
Despite these steps, challenges persist. The security environment in Syria remains precarious, deterring investors, with estimates suggesting tens of billions of dollars needed for rebuilding key sectors like industry, agriculture, and energy, which have declined by 70%-90% since 2011. Initial funding is likely to focus on electricity, transport, oil and gas extraction, port development, and residential infrastructure. This development marks a potential shift in diplomatic ties, aiming for greater stability, but security and investment hurdles remain significant.
