The European Union has signed a deal with Egypt to broaden its collaboration. This agreement includes funding of 7.4 billion euros ($8.06 billion) from 2024 to 2027.
This financial support will include 5 billion euros in macro-financial assistance, 1.8 billion euros in investments, and 600 million euros in grants. The macro-financial aid will comprise 1 billion euros in emergency funding in 2024. This significant financing will improve the EU-Egypt connection and contribute to the country’s economic growth.
European governments have been expressing concerns about the potential for instability in Egypt, a country with a population of around 106 million. Economic adversity in Egypt has pushed more people to migrate in recent years, and inflation has been running close to record highs. Many Egyptians are struggling to make ends meet and feel financial pressure.
However, the situation in Egypt has improved somewhat in the past month. The government has managed to secure a record deal for Emirati investment, expand its loan program with the International Monetary Fund (IMF), and significantly devalue its currency. These developments have given the government some breathing room and eased financial pressure.
Diplomats have been noting Egypt’s strategic importance in the region. The conflict in neighboring Sudan has created the world’s biggest displacement crisis, and the war in Gaza, which borders Egypt’s Sinai Peninsula, has underscored the country’s significance. Egypt has been the primary channel for international humanitarian aid sent to Gaza. It has been working with Qatar and the United States to mediate a truce between Israel and Hamas.
