The European Union (EU) has disclosed plans to provide around €7.4 billion support to Egypt as part of effort to stabilise its economy according to reports from Bloomberg.
This is coming on the heels of over $40 billion investments and support from the United Arab Emirates (UAE), International Monetary Fund (IMF) and the World bank.
The EU is set to unveil a plan to its member states’ ambassadors on Wednesday. The proposal involves providing Egypt with two macro-financial assistance loans.
One is a short-term deal amounting to €1 billion, while the other is a larger package totaling €4 billion, intended to span two-and-a-half years.
The disbursement of funds would be contingent upon Egypt’s commitment to implementing a series of reforms.
In addition to the loans, further financial support for Egypt will be extended through grants and other mechanisms.
Key priority sectors for investment
After several months of negotiation over an aid package, the E.U and Egypt have reached an agreement. The priority sectors for funding identified by both parties include energy and enhancing trade capabilities within the Suez Canal Economic Zone.
Furthermore, efforts are underway to finalize a joint declaration to broaden their collaboration in various domains such as economic stability, migration, security, and water management.
European Commission President Ursula von der Leyen plans to visit Cairo on Sunday, coinciding with the intended signing of the declaration by both parties.
Backstory
Nairametrics earlier reported that Egypt secured around $40 billion deals from the UAE, IMF and World bank within 10days in the promise of floating its currency.
The war in Ukraine, the conflict between Israel and Hamas on its border, and the Houthi rebel attacks on vessels in the Red Sea have inflicted a significant blow to commodity prices, trade, and tourism in Egypt.
Egypt’s recent economic challenges began in 2022 following Russia’s invasion of Ukraine, which led to soaring commodity prices, particularly for wheat.
The country’s inflation rate in February jumped from 29.8% to 35.7%.
