Brussels: Europe and the Arabs
The European Commission in Brussels stated, through a statement, the reasons that made it agree to grant a soft loan to Egypt worth one billion euros, which will be disbursed within the next few days. The statement also included an indication that discussions have already begun to disburse other loans worth up to 4 billion euros during the coming period. The European statement said: “The Commission has decided to disburse €1 billion in loans to Egypt after meeting the political conditions agreed with the European Union within the framework of the ongoing macro-financial assistance. This amount, which corresponds to the first and only disbursement, will be disbursed in the coming days. This financial support will help Egypt cover part of its financing needs for the financial year 2024/25 and ensure macroeconomic stability, while supporting the domestic reform agenda in conjunction with the ongoing IMF program. Egypt’s economy began to recover earlier in the year after the announcement of IMF and EU support, after suffering significant pressures on the balance of payments. While the recovery continues, the economy remains affected by the economic effects of the Russian war of aggression against Ukraine and the situation in the Middle East. This disbursement comes after the Commission concluded that Egypt has taken measures to enhance macroeconomic resilience by unifying the segmented exchange rate and improving its public financial management, while expanding the scope of its social security program. Progress has been made in the business and investment environment, through increasing transparency on investment and import conditions, and strengthening the role of the Competition Authority. Progress has also been made in promoting the green transformation through the adoption of the updated Egyptian Sustainable Energy Strategy until 2040 and the strengthening of private sector participation in renewable energy production. This multilateral agreement, together with the second €4 billion operation currently under discussion with participating legislators, forms an essential part of the comprehensive strategic partnership between the EU and Egypt. It comes in response to the multiple economic challenges over recent years, exacerbated by the complex geopolitical situation in the Middle East, where Egypt is a key pillar of stability and a strategic partner for the EU.