EU to provide over €7 billion in financial aid to Egypt

The EU finalised an economic investment and migration pact with Egypt on March 17 that will be worth €7.4 billion to Cairo over the coming four years.

The agreement, described by officials as a "comprehensive and strategic partnership," is the latest and arguably most ambitious in a series of deals the EU commission has brokered with North African states over the past year. The EU executive has signed similar agreements with Tunisia and Mauritania, EU Observer reports.

The agreement marks a "historic milestone", said EU commission president Ursula von der Leyen, who signed the agreement with Egypt's president Abdel Fattah el-Sisi, at a press conference on Sunday.

"Given your political and economic weight, as well as your strategic location in a very troubled neighbourhood, the importance of our relations will only increase over time," said von der Leyen.

Negotiations between EU and Egyptian officials began last year. Although the pacts have been widely viewed as 'cash for migrant control' arrangements, only €200 million will be provided by the EU in assistance to Egypt for migration programmes. These will include plans to fortify its borders with Libya, a major transit point for migrants fleeing poverty and conflicts in Africa and the Middle East, and to host Sudanese refugees fleeing a civil war that has displaced 1.7 million people, of whom over 300,000 are in Egypt, since last April.

Meanwhile, according to the most recent data published by the International Organization for Migration (IOM), there are over 100,000 Egyptian migrants in neighbouring Libya.

A paper published by the EU executive stated that "Egypt and the EU will continue to work on their commitments to further promote democracy, fundamental freedoms, and human rights, gender equality and equal opportunities."

It adds that Egypt will focus on "tackling the root causes of irregular migration, combating smuggling of migrants and trafficking in persons, strengthening border management, and ensuring dignified and sustainable return and reintegration."

At €7.4 billion, the finance on offer to Egypt is almost seven times more than the funds offered to Tunisia and Mauritania combined, and reflects the strategic importance of Egypt, which also borders Palestine.

Around €5 billion of the EU's financial support will be composed of direct budget support, concessional finance, and grants, according to the EU's mission in Cairo, while Brussels will also organise an EU-Egypt Investment Conference in the Egyptian capital later this year.

Similar to the offer of support for green hydrogen projects in Mauritania, the EU-Egypt deal will see Brussels invest in an electric interconnector project that would connect Egypt to Greece, and is designed to increase energy security in Europe.

"Egypt has all the resources to become a renewables hub, in particular when it comes to renewable hydrogen," the commission added.

Egypt will now be expected to negotiate its accession to other EU programmes such as Creative Europe and Horizon Europe, says the EU commission.

El Sisi's government has been under severe economic pressure in recent years, facing high unemployment and rising debt. Earlier this month, it agreed terms with the International Monetary Fund to increase its loan arrangement with the Fund from $3bn [€2.74bn] to $8bn, while Egyptian officials have briefed that the World Bank is expected to extend around $3bn [€2.6bn] in financing to Cairo.

However, the commission's offer of major economic support for authoritarian regimes with a track record of repressing democracy and human rights abuses has been criticised by civil society groups and some MEPs.

Human Rights Watch, an NGO, accused the EU of 'rewarding' the "abysmal repression" of the el Sisi regime.

"EU leaders must ensure that the Egyptian authorities adopt clear benchmarks for human rights," said Eve Geddie of Amnesty International.