EU to provide Egypt with 8.06 billion dollars over three years, senior official says

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The European Union will provide Egypt with 7.4 billion euros ($8.06 billion) in financing from 2024-2027 under a deal for expanded cooperation to be announced in Cairo on Sunday, a senior EU Commission official said.

The money will include 5 billion euros of macro-financial assistance, 1.8 billion euros of investments and 600 million euros in grants, the official said.

Of the macro-financial assistance, 1 billion euros of emergency finance will be provided in 2024, the official said.

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The package will include billions in loans over coming years and aims to step up Egyptian energy imports to help Europe “move further away from Russian gas” amid the Ukraine war, a senior European Commission official told reporters.

EU chief Ursula von der Leyen -- who was expected in Cairo, joined by the leaders of Austria, Belgium, Cyprus, Greece and Italy -- was to sign the deals later in the day with Egyptian President Abdel Fattah al-Sisi.

Egypt, mired in a painful economic crisis, borders war-battered Libya and two ongoing conflicts -- the Israel-Hamas war in the Gaza Strip, and Sudan’s war between the regular armed forces and the paramilitary Rapid Support Forces.

“Egypt is a critical country for Europe today and for the days to come”, said the commission official, who asked not to be named, and who pointed to Egypt’s “important position in a very difficult neighborhood, bordering Libya, Sudan and the Gaza Strip”.

Egypt already hosts around nine million migrants and refugees, including four million Sudanese and 1.5 million Syrians, according to the UN’s International Organization for Migration.

The EU official said the deal includes steps on “security, counter-terrorism cooperation and protection of borders, in particular the southern one” with Sudan.

The agreement follows other deals the EU has sealed with Libya, Tunisia and Mauritania to stem the flow of irregular migrants across the Mediterranean Sea.

They aim to limit arrivals at a time of rising anti-immigrant rhetoric in Europe and the growth of right-wing populist political parties in several EU nations.

Highly indebted Egypt, the Arab world’s most populous nation, is in dire need of financial help as it weathers a severe economic crisis marked by rapid inflation.

The International Monetary Fund this month agreed an $8 billion loan package after Cairo implemented a flexible exchange rate and raised interest rates.

The agreement with the EU includes five billion euros in loans, 1.8 billion euros in investments and hundreds of millions for bilateral projects including on migration.

Egypt’s economy, dominated by military-linked enterprises and focused on expensive infrastructure mega-projects, has been hit hard by a series of recent economic shocks.

Among them have been the COVID-19 pandemic’s impact on tourism, higher food prices amid the Ukraine war, and attacks by Yemen’s Houthis on Red Sea shipping that have slashed Suez Canal revenues.

Egypt’s external debt has ballooned to $164.7 billion, and the cost of servicing it is expected to reach $42 billion this year.

With Reuters

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