On June 19, 2024, Hezbollah leader Hassan Nasrallah threatened Cyprus with retaliation if it allowed Israel to use its airports and bases to attack Lebanon.

Cyprus, the European Union’s (EU) easternmost member, is within range of Hezbollah’s missiles. This means that in the event of a spill-over from the ongoing Israeli-Palestinian conflict, the island nation – and by extension the EU – could be drawn in. Aware of that risk, Nicosia promptly assured Lebanon that it would not allow attacks against it from its territory. 

These developments highlight Lebanon’s delicate position: tensions with Israel have continued to simmer following the Hamas-led attack on October 7, 2023. Since then, tens of thousands of people have been displaced on both sides of the Israeli-Lebanese border amid a heavy exchange of fire. Recently, with strikes growing more frequent and the Israeli army positioning itself for potential conflict, fears of a full-blown have increased.

These concerns are worsened by the tumultuous and conflict-ridden history of the Israel-Lebanon relationship. The 1982 Lebanon War took tens of thousands of lives and led to the rise of Hezbollah. Nearly 25 years later, an intense 34-day conflict triggered by a Hezbollah cross-border raid on an Israeli patrol resulted in more than 1000 casualties and widespread destruction.

Further escalation could be disastrous for the Middle East and the EU, especially as other countries might get involved. Hezbollah has strong ties to Iran, which has suggested its full support in the event of an Israeli aggression against Lebanon. The Iranian mission to the UN threatened that “an obliterating war will ensue” and warned that “all options, including the full involvement of all Resistance Fronts are on the table.”

The Resistance Front is an alliance of Iran-backed armed groups, including Hamas, Yemen’s Houthis and Iraqi Shiite militias. Iran’s new reformist president, Masoud Pezeshkian, has signalled that there will be no change in his country’s policy towards Israel, while also reiterating the Islamic Republic’s support for Hezbollah.

In addition, Türkiye’s President Recep Tayyip Erdogan recently said that his country stands in solidarity with Lebanon and urged other regional countries to do the same. Two other important regional actors, namely Syria and Jordan, could also be pulled into the conflict due to their proximity and historical tensions with Israel.

Beyond the Middle East, the US – Israel’s closest and most powerful ally – could also be drawn into the conflict, even though it has warned Israel that it might not be able to defend it against an all-out war with Hezbollah.

For the EU, the stakes couldn’t be higher. While the threat of a Hezbollah attack on Cyprus currently appears more like inflammatory rhetoric than a realistic possibility, if such an attack were to occur, it would have far-reaching consequences. An escalation of this sort would trigger the EU’s collective defence obligations, which would require a bloc-wide response at a time when internal cohesion is already strained, with leaders like Hungary’s Orbán blocking decision-making processes.

To prevent that scenario, the EU has been keen to maintain Lebanon’s stability. In January, EU foreign policy chief Josep Borrell visited Lebanon to discuss the border situation and stress the importance of avoiding regional escalation. Last month, Borrell further expressed support for the ongoing mediation efforts, “led by the US and France to mitigate confrontation between Israel and Hezbollah, and for Lebanon and Cyprus, which have been threatened by Hezbollah.”

Failed diplomacy, displaced people

An Israel-Lebanon war would represent another significant diplomatic failure for the EU and the West, further eroding their global credibility in the wake of the Gaza conflict. Moreover, it would likely trigger a devastating humanitarian catastrophe, with the potential for extensive civilian casualties. The toll could be dramatically higher if additional regional actors join the conflict.

Lebanon would be particularly vulnerable, given Hezbollah’s strategic presence in villages and civilian areas and Israel’s superior military capacities. Civilian infrastructure would also likely suffer severe damage, making post-war reconstruction extensive and costly.

The impact of a war between Israel and Lebanon on the EU would be multifaceted. Beyond endangering the security of Cyprus, an all-out conflict could mean a substantial refugee influx for the EU as Lebanon hosts the largest number of refugees per capita in the world. Apart from Syrian asylum seekers, Lebanon has also historically hosted a large Palestinian refugee population, with around 475,000 registered with the UN in Lebanon. They have been forced into Lebanon in successive waves since 1948, when many Palestinians fled or were expelled by Zionist forces.

An Israel-Lebanon war would represent another significant diplomatic failure for the EU and the West, further eroding their global credibility in the wake of the Gaza conflict.

Moreover, a war between Hezbollah and Israel could also have a domino effect, triggering a massive exodus of refugees – Israeli, Lebanese, Syrian, Palestinian, and potentially from across a destabilised Middle East– towards the EU. This would mirror the Syrian civil war when millions of refugees fled to the EU, challenging the bloc’s ability to manage aid as well as integration and resettlement processes.

The EU’s current diplomatic efforts in the region are narrowly centred on preventing migration. Brussels recently signed a deal with Beirut providing one billion euros over three years to support the Lebanese economy and enhance border management cooperation, in exchange for preventing irregular migrants from coming to Europe. Three-quarters of the funds were earmarked for assisting Lebanon as a host country for Syrian refugees and other displaced people.

The agreement was announced amid a surge of Syrian refugees coming to Cyprus from Lebanon, which pressured the EU to intervene. In the first three months of 2024, over 2,000 people arrived in Cyprus by sea, compared to around 80 in the same time frame in 2023.

Similar agreements with Egypt and Tunisia reveal a broader EU strategy: deflect migrant processing to third countries and keep migrants from entering the EU, as the bloc further tightens its borders.

Critics argue that the EU’s recently brokered migration deal primarily serves its own interests, neglecting Lebanon’s need for significant economic and structural reforms. They warn that “any deal that avoids tackling Lebanon’s deep problems will fail to stabilise the country and will not address the reasons that push people towards Europe.” The deal does not even properly cover the cost of Syrian refugees living in Lebanon: According to the Lebanese Social Affairs Minister Hector Hajjar, handling Syrian asylum seekers costs the country 1.5 billion Dollars a year.

While the effectiveness of the EU’s approach is questionable, one thing is certain: Lebanon urgently needs support for handling its migrant and refugee population. The current level of assistance, with Lebanon receiving only 27 per cent of global funding for the Syrian refugee response in 2023, is woefully inadequate.

Energy turmoil

Apart from a widespread humanitarian crisis, an Israeli-Lebanese war could also lead to extensive and severe economic ramifications by disrupting trading routes and affecting energy supplies. The EU has already taken a heavy hit in this area following Russia’s invasion of Ukraine in 2022.

Hezbollah and its allies have the ability to disrupt the Red Sea energy route, which is crucial for international oil and natural gas flows into the EU. Already under attack by the Houthi fighters since the start of 2024, with a full-fledged war, the route could be completely compromised, especially if Iran involves the Houthi fighters in a possible war.

Recent moves from key energy players underscore the gravity of the situation in the Red Sea. In January 2024, QatarEnergy, a major supplier to Europe, quickly halted shipments through the crucial waterway to consider alternative routes. Similarly, the Kuwait Oil Tanker Company temporarily suspended passages through the Red Sea due to the Houthi attacks.

These trade disruptions could fuel inflation by driving up energy costs, similar to what happened after Russia invaded Ukraine.

A struggling state

Lebanon’s problems are further complicated by the fact that the country is teetering on the brink of failed statehood. Beirut has been crippled by a political and economic meltdown since 2019, with the Lebanese Pound losing more than 90 per cent of its value. This has led to soaring prices for basic goods and services and pushed almost 80 per cent of the population under the poverty line.

The ongoing crisis has led to social unrest and a growing sense of despair, leaving Lebanon vulnerable to factions and militant groups. As the government has been unable to provide people with basic needs such as electricity and fuel, Hezbollah has used the opportunity to fill the void and boost its popularity.

The EU’s actions, or inactions, will have a profound impact on Lebanon’s future and, perhaps, the Middle East.

What’s more, Lebanon faces rampant corruption at all levels, ranking near the bottom globally – 149 out of 180 – in Transparency International 2023’s Corruption Perception Index.  For instance, despite international pressure, no government official has been held accountable for the devastating explosion that rocked Beirut airport in 2020, killing 2018 people.

To make matters worse, Lebanon has not had a president since 2022, when former head of state Michel Aoun’s term ended. Since then, the deeply divided Parliament, with different factions opposing each other, has failed to nominate a candidate with enough votes to succeed him. While presidential vacuums are not new in Lebanon, this one coincides with a simmering border crisis with Israel and a devastating four-year economic meltdown, creating a perfect storm of instability.

How can the EU help?

As the spectre of escalating tensions hangs heavy over Lebanon, the EU faces a critical question: can it prevent a devastating conflict that would send shockwaves through the Middle East (and beyond) and trigger a massive refugee crisis?

Without a doubt, Brussels must ramp up its current diplomatic efforts, fostering dialogue between all parties involved in the ongoing tensions. This means that the EU should approach even countries that have proven difficult to cooperate with – like Iran – but which have a stake in the situation nonetheless. These regional actors have an undeniable influence on the developments in and around Lebanon, and their voices must be heard at the negotiating table.

At the same time, the EU should strongly advocate for an immediate ceasefire in Gaza. This urgent step must be coupled with sustained efforts towards a viable long-term solution for Palestine. Resolving the Palestinian issue is not only critical in its own right but would also significantly reduce tensions between Israel and Lebanon, averting a potential wider conflict.

However, diplomacy alone won’t suffice. To prevent Lebanon from collapsing entirely, the EU needs to invest in the country’s future. It cannot simply funnel resources into areas of its own interest, like the recent migration deal. Lebanon’s needs must take centre-stage in any cooperation.

The foundation for a stronger relationship already exists. Since 2006, the EU and Lebanon have been partners through their Association Agreement. This deal granted Lebanon free access to the EU market for its industrial goods and most of its agricultural exports. By 2022, the EU had become Lebanon’s biggest trading partner, accounting for nearly a third of the country’s total trade.

Other initiatives, like the 12-million-euro project launched in 2023 to enhance the integrity, transparency, and accountability of the Lebanese public administration, must be further bolstered. The EU should also apply targeted sanctions against the Lebanese elites undermining democracy and the rule of law in the country, as the EU framework for such a move has been in place since 2021.

The EU’s actions, or inactions, will have a profound impact on Lebanon’s future and, perhaps, the Middle East. Whether the bloc will step up and help Lebanon weather this storm remains an open question. One thing, though, is certain: time is short, and the stakes couldn’t be higher.