CAIRO: The EU and Egypt on Sunday signed a €7.4 billion ($8 billion) financial package to support the indebted North African country, boost energy sales to Europe and stem irregular migrant flows.
European Commission President Ursula von der Leyen was joined in Cairo by the leaders of Austria, Belgium, Cyprus, Greece and Italy for the signing ceremony with Egyptian President Abdel Fattah El-Sissi.
The deal includes billions in credit over coming years for highly indebted Egypt, and stepping up energy sales that could help Europe “move further away from Russian gas,” said a senior European Commission official.
The aid package includes both grants and loans over the next three years for the Arab world’s most populous country, according to the EU’s mission in Cairo. Most of the funds — €5 billion — are macro-financial assistance, according to a document from the EU mission in Egypt.
The mission said that the two sides have promoted their cooperation to the level of a “strategic and comprehensive partnership,” paving the way for expanding Egypt-EU cooperation in various economic and noneconomic areas.
El-Sissi’s office said in a statement that the deal aims to achieve “a significant leap in cooperation and coordination between the two sides and to achieve common interests.”
The EU will provide assistance to Egypt’s government to fortify its borders, especially with Libya, a major transit point for migrants fleeing poverty and conflicts in Africa and the Middle East.
The 27-nation bloc will also support the government in hosting Sudanese who have fled nearly a year of fighting between rival generals in their country. Egypt received more than 460,000 Sudanese since April last year.
The deal comes amid growing concerns that Israel’s looming ground offensive on Gaza’s southernmost town of Rafah could force hundreds of thousands of people to break into Egypt’s Sinai Peninsula. The Israel-Hamas war, now in its sixth month, has pushed more than 1 million people to Rafah.
The deal would inject much-needed funds into the Egyptian economy which has been hit hard by years of government austerity, the coronavirus pandemic, the fallout from Russia’s full-scale invasion of Ukraine, and most recently, the Israel-Hamas war in Gaza.
Egypt reached a deal with the IMF earlier this month to increase a bailout loan to $8 billion, up from $3 billion, after marathon negotiations. The deal with the IMF was combined with economic reforms that included the flotation of the Egyptian pound and a sharp raising of the main interest rate.
