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EU signs €1bn financing deal for Egypt at investment forum

June 29, 2024

The funding plan will help Cairo to make substantial economic reforms, along with billions in investments by European companies.

European Commission president Ursula Von der Leyen and Egypt president Abdel Fattah el-Sisi pictured during a diplomatic meeting in Cairo, Egypt, on March 17 2024
Egyptian President Abel Fattah el-Sisi (right) has presided over the worst economic crisis in Egypt’s recent historyImage: Dirk Waem/dpa/Belga/picture alliance

European Commission President Ursula von der Leyen announced Saturday a €42 billion ($45 billion) investment by European companies in Egypt as well as cash from Brussels to help the country's troubled economy.

Von der Leyen told the Egypt-EU Investment Conference in Cairo that the firms had signed more than 20 new deals or memoranda of understanding (MOUs) with the Middle East country.

The European Union has promised Egypt €7.4 billion in financial support for its economic reforms. On Saturday, the two sides signed an agreement for the first €1 billion.

European officials say they want to help Egypt — which has suffered repeated economic shocks from the COVID-19 pandemic and high inflation — become more resilient by boosting investment and the private sector.

A strong Egypt important to EU

Writing about the investments on X, formerly Twitter, von der Leyen said EU states and Egypt want to create a partnership based on a "framework of trust and certainty."

"The stability of Egypt is important for the region. In a world of turmoil, we have deepened our relations, building on our historical ties," she added.

The EU chief said the two partners would keep working together in sectors including trade, energy, water, migration, skills and mobility.

Addressing the conference, von der Leyen told delegates that the investment would "accompany and incentivize Egypt's reform agenda," which she said would "foster a stronger business environment and attract more investment and create more good jobs."

Egyptian President Abdel Fattah el-Sissi said in a speech that the conference "marks the first implementation steps in the course of elevating the relations and reflects [the[ commitment of Egypt and the EU to go beyond the phase of pledges to the phase of implementation."

He said that during successive international and regional crises, "Egypt has proven to be a reliable partner in facing joint challenges in a way that achieves security and stability."

Egypt wins EU, regional and international backing

As well as the EU, Egypt has received billions in foreign financing and pledges this year from the United Arab Emirates, the International Monetary Fund and the World Bank.

The cash injections have eased a long-running currency crisis at a time when Egypt was trying to manage the impact of wars in neighboring Gaza, and in Sudan, on its southern border.

Von der Leyen was accompanied by two other EU commissioners: Neighborhood Commissioner Olivér Várhelyi and Economy Commissioner Vladis Dombrovskis.

Dombrovskis signed an MOU for short-term financial assistance of up to €1 billion to support Egypt's economic reform program, part of the larger €7.4 billion package announced by Brussels in March.

The money will be invested in sectors including clean energy, manufacturing, and food security, according to the Commission.

Rights groups want cash tied to rule of law demands

The deals have been criticized by human rights groups who say Egypt's government does not respect the rule of law.

Thousands of people have been detained in recent years, including journalists, critics, opposition politicians, peaceful protesters, and human rights defenders.

"This deal is one of the most expensive financial assistance deals the EU has ever signed off on with a country outside the EU," said Eve Geddie, Head of Amnesty International’s European Institutions Office, on Wednesday. "By failing to ensure the Egyptian authorities adopt clear benchmarks for human rights and rule of law as a pre-condition for funding, the EU is breaking its own rules."

In a letter earlier this month, Human Rights Watch and Egyptian, regional, and international human rights groups called on Brussels to ensure the cash "secures concrete, measurable, structural, and timebound human rights progress and reforms in the country."

mm/kb (AP, dpa, Reuters)