I’ll get to Obama’s press conference in a moment. But first, this is a major shift in foreign policy.

U.S. Secretary of State Hillary Rodham Clinton says the Obama administration has decided to formally recognize Libya’s main opposition group as the country’s legitimate government. The move gives foes of Libyan leader Moammar Gadhafi a major financial and credibility boost.

Clinton announced Friday that Washington accepts the Transitional National Council as the legitimate governing authority of the Libyan people. Diplomatic recognition of the council means that the U.S. will be able to fund the opposition with some of the more than $30 billion in Gahdafi-regime assets that are frozen in American banks.

Remember yesterday, I noted that the rebels in Benghazi were running out of money. Having the US recognize the TNC was the only way to release the $30 billion of frozen assets. This was almost a necessity for the war to continue.

Whether this will spur the rebels to victory is less clear. They will have the resources to do so, but on the battlefield, there has been a series of ebbs and flows. The rebels win a particular area, and then lose it back. They’re basically in a stalemate. And NATO’s air support hasn’t broken that stalemate, as the rebels ask for more and more. The $30 billion could buy weapons. But what the rebels may really need is ground support, something that no NATO member is excited about doing.

This is a big deal from a foreign policy standpoint, to go so far as to recognize a rebel government as legitimate. I’m not sure it changes the momentum in the war appreciably. It stops what could have been a rout because of lack of funds on the part of the TNC.

David Dayen

David Dayen