Brussels: Europe and the Arabs
A few days after the European Parliament approved financial support for Egypt, representatives of the EU member states (the Council) approved the negotiating position on the decision to grant Egypt €4 billion in macro-financial assistance (MFA). The Council's position reflects its approval of the Commission's proposal on this matter without any changes.
A European statement issued in Brussels, a copy of which we received, stated that, in addition to the International Monetary Fund program for the period 2024-2027, this assistance will help Egypt cover part of its external financing gap.
The EU loan will be disbursed in three tranches, with each tranche linked to satisfactory progress in implementing the IMF program and to a number of additional policy measures to be agreed upon between the European Commission and the Egyptian authorities.
After the Council approves the negotiating mandate, the Council Presidency may enter into inter-institutional negotiations with the European Parliament with the aim of reaching a common position on this proposal. The European Parliament adopted its negotiating mandate on 1 April 2025.
On 15 March 2024, the European Commission proposed a macro-financial assistance operation (MFA) for Egypt totaling €5 billion in concessional loans, following Egypt's request on 12 March 2024. The MFA operation was divided into two parts, worth €1 billion and €4 billion, respectively.
The first loan to Egypt, worth €1 billion, approved in April 2024, aimed to cover part of its financing needs for the 2024/25 financial year and ensure macroeconomic stability. The second multilateral financing loan, worth €4 billion, will address Egypt's deteriorating macro-financial situation and financing needs and is expected to cover Egypt's financing gap between July 2025 and June 2027. The loan will be granted on terms that enable Egypt to repay the loan over a long period, including a possible grace period.
These two operations are part of the comprehensive strategic partnership signed with Egypt on March 17, 2024, during the visit of the President of the European Commission and five other European leaders.