Gamal Abdel Nasser - Nationalization of Suez Canal

Nationalization of Suez Canal

After the three-year transition period ended with Nasser's official assumption of power, his domestic and independent foreign policies increasingly collided with the interests of European powers in the region, namely the UK and France. The latter condemned his strong support for the Algerian struggle for independence from France; the Eden government of the UK was agitated by Egyptian campaigns undermining the Baghdad Pact which Nasser viewed as a disruption of "Arab solidarity." In addition, Nasser's adherence to neutralism and the Non-Aligned Movement, recognition of the Communist People's Republic of China, and his arms deal with the Soviet bloc, also alienated American support for his regime. Thus, the United States and the UK abruptly withdrew their offer to finance construction of the Aswan High Dam.

On 26 July 1956, in retaliation for the loss of funding and to help pay for the Aswan project, Nasser gave a speech in Alexandria where he denounced Western influence in the Arab world and announced the nationalization of the Suez Canal Company, in breach of the agreement he had signed on 19 October 1954. He also ensured that existing stockholders would be paid off. The nationalization move was greeted by the crowd very emotionally, and throughout the Arab world, thousands entered the streets shouting slogans of support. US ambassador Henry A. Byroade stated "I cannot over-emphasize popularity of the Canal Company nationalization within Egypt, even among Nasser's enemies." According to Aburish, this was Nasser's largest pan-Arab triumph at the time and "soon his pictures were to be found in the tents of Yemen, the souks of Marrakesh, and the posh villas of Syria." The official reason given for the nationalization was that funds from the Suez Canal would be used for the construction of the dam in Aswan.

That same day, Egypt closed the canal to Israeli shipping. Egypt also closed the Straits of Tiran to Israeli shipping, and blockaded the Gulf of Aqaba, in contravention of the Constantinople Convention of 1888. Many argued that this was also a violation of the 1949 Armistice Agreements.