Egyptian coup underlines America’s diminishing influence in the Middle East

This week’s coup in Egypt leaves President Obama’s administration in an awkward position. Although the State Department has insisted it remained neutral in the dispute, American taxpayers have been supporting the Egyptian armed forces since 1948 with more than $70 billion in military and economic aid. A further $1.3 billion of military aid is budgeted for next year.

Obama has now instructed officials to review American aid commitments to Egypt. There is a delicate balancing act to be played here. Neither Obama nor the State Department called yesterday’s events a ‘coup’ because there are legal implications restricting U.S. aid to countries where an elected head of state is overthrown by a military coup.

These events are challenging a long-held consensus in the Obama administration that American aid can be used to leverage influence and power. That thinking has also shaped the belated decision by Obama to back Syrian rebels with financial and military aid.