Egypt and the European Union have signed the second phase of the Macro-Financial Assistance (MFA) program, valued at €4 billion, to support Egypt’s state budget and macroeconomic stability. The agreement was sealed during the Egypt-EU Summit held in Brussels, marking a new milestone in the comprehensive strategic partnership between Cairo and the European bloc.
The signing ceremony was witnessed by Egyptian President Abdel Fattah El-Sisi, European Commission President Ursula von der Leyen, and European Council President Anthony Costa. The memorandum of understanding was signed by Dr. Rania Al-Mashat, Egypt’s Minister of Planning, Economic Development, and International Cooperation, and Valdis Dombrovskis, the EU Commissioner for Economy and Productivity.
A Deeper Economic Partnership
Minister Al-Mashat explained that the MFA mechanism is a core component of a broader Egypt–EU partnership focused on trade, investment, and economic resilience. The second phase, worth €4 billion, follows a year of coordinated discussions between Egyptian authorities and the European Commission to finalize an 87-reform matrix within Egypt’s national structural reform program.
“These reforms aim to strengthen macroeconomic stability, enhance competitiveness, and support the green transition — including protection of the Red Sea’s ecological system,” Al-Mashat said. “This partnership helps Egypt sustain its economic reform trajectory, extend debt maturities, improve fiscal sustainability, and close the financing gap.”
New €75 Million Grant for Local Development
In addition to the MFA deal, Al-Mashat signed another financing agreement with Dubravka Šuica, the EU’s newly appointed Commissioner for Mediterranean Affairs. The agreement, titled “EU Support for Implementing Social and Economic Reforms at the Local Level,” provides a €75 million grant under the NDICI–Global Europe framework, with joint financing from Germany.
The initiative aims to advance the strategic Egypt-EU partnership through integrated development interventions in lower-income regions. It focuses on improving access to education, healthcare, and water services, expanding economic opportunities, and strengthening social resilience, particularly for vulnerable groups and refugees.
Focus on Human Capital and Sustainable Development
This new program forms part of the sixth pillar of the Egypt–EU Strategic Partnership, centered on “Human Capital and Demography.” It directly supports Egypt’s ongoing social and economic reform agenda and addresses the impacts of regional and global crises.
Key project pillars include:
- Expanding access to essential public services and citizen participation.
- Promoting inclusive economic growth, especially for women and youth.
- Enhancing healthcare quality tailored to women’s and children’s needs.
- Linking social development with local economic services to ensure sustainable community impact.
Several national entities will participate in implementation, including the Ministry of Health and Population, the Micro, Small, and Medium Enterprise Development Agency, the Urban Development Fund, and the General Organization for Physical Planning, alongside the Ministry of Planning and Economic Development.
Phase One Completed Earlier This Year
In December 2024, Minister Al-Mashat announced the European Parliament’s approval of the first phase of the MFA program, valued at €1 billion, which Egypt received in January 2025. The new €4 billion phase builds on that success, reinforcing the EU’s role as one of Egypt’s leading economic partners and supporters of fiscal and structural reform.
