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Sunday, June 16, 2024

EU Pledges €7.4 Billion Aid to Stabilize Egypt’s Economy and Curb Migration

In a bid to bolster Egypt’s fragile economy and reduce its reliance on Russian gas, the European Union (EU) has earmarked a hefty €7.4 billion, or approximately $8.06 billion, funding package. 

This financial aid, directed towards Egypt for the 2024-2027 timeframe, will primarily focus on addressing macro-financial assistance, investments, and grants.

Economic Lifeline Amidst Crisis

Egypt
Credits:DepositPhotos

The funding package is intended to serve as a lifeline for Egypt’s economy, which has been plagued by economic shocks stemming from ambitious infrastructure megaprojects. 

The EU’s €5 billion macro-financial assistance, €1.8 billion of investments, and €600 million in grants over the next three years aim to put Egypt’s wavering economy back on track.

A high-ranking Commission official, preferring anonymity, underscored Egypt’s key role in a tumultuous region, pointing out its crucial position bordering the conflict zones of Libya, Sudan and the Gaza Strip. 

Wage wars in these regions have caused significant blows to Egypt’s major income sources, such as tourism, and have past strained the Suez Canal’s shipping capacities.

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International Support Amidst Dire Circumstances

Amid its economic straits, Egypt has been implementing economic reforms, landing an $8 billion loan package from the International Monetary Fund (IMF)

Consequent to Cairo’s efforts towards a flexible exchange rate and heightened interest rates, Egypt bolstered international confidence, with the United Arab Emirates also committing €32 billion in direct investment into the Egyptian economy, primarily for a construction project in the coastal city of Alexandria.

The Migration Dilemma: An EU Perspective

The EU’s funding package isn’t devoid of strategic motives. It intends to stem the increasing migration rates from Egypt into Europe. 

The EU seeks to fortify the stability of a region already housing approximately 9 million migrants and refugees, according to the UN’s International Organization for Migration. 

The deal includes measures aimed at enhancing border security, particularly along Egypt’s southern border with Sudan, and counter-terrorism cooperation.

Yet, this approach has received criticism from human rights organizations. 

US-based Human Rights Watch condemned the EU’s “cash-for-migration-control” strategy, labeling it as a tactic that empowers authoritative regimes and betrays those working in high-risk environments, such as human rights defenders, journalists, and activists.

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To the Future

Ursula von der Leyen
Credits: DepositPhotos

As the European Commission President, Ursula von der Leyen, prepares to meet President Abdel Fattah el-Sissi of Egypt in Cairo for the official signing of the agreement, this EU-Egyptian “strategic partnership” is eyed with hopeful anticipation and, equally, with wariness. 

It points towards a shared commitment towards renewable energy, trade, and security between the continents, although the execution of the deal and its consequences, particularly the impacts on the migration dynamics, will be subjected to scrutiny in due course.

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