Cairo (The Brussels Morning Newspaper) – The Egyptian Cabinet agreed to several funding deals with the European Union (EU), totalling over €1 billion. The most extensive portion of the funding, €1 billion, will be assigned to macro-financial assistance(MFA).
How Will the €1 Billion EU Funding Impact Egypt’s Economic Stability?
This soft loan, which is predicted to be disbursed before the end of the year, offers long repayment terms and low interest rates. It is the foremost tranche of a larger €5 billion package of concessional loans that will be paid over the next few years. The funds will be utilised to alleviate Egypt’s external financing conditions, ease the government’s balance of payments, and increase foreign exchange reserves. They will also help macroeconomic stability, improve the business environment, and promote a green transition.
What Are the Objectives of the EU’s Financial Assistance to Egypt?
In addition to the macro-financial aid, the EU has pledged €8 million to help Egypt’s child protection systems. This funding will be utilised to combat child labour, ensure access to education and healthcare, and execute effective child protection frameworks.
Furthermore, the EU has decided to provide €3 million to support the local manufacturing and growth of vaccines and medicines. This investment aligns with Egypt’s efforts to support its healthcare sector and decrease reliance on imports.
The EU’s financial support mirrors the growing partnership between the two countries. Earlier this year, Egypt and the EU inscribed a joint strategic and comprehensive cooperation agreement that outlines a broad range of cooperation areas, including economic development, trade, and social problems.
Why Are Human Rights Groups Critical of the EU’s Financial Deal with Egypt?
The deals have been condemned by human rights groups who declare Egypt’s government does not respect the rule of law. Thousands of people have been imprisoned in recent years, including journalists, critics, opposition politicians, peaceful protesters, and human rights defenders.
“This deal is one of the most expensive financial assistance deals the EU has ever signed off on with a country outside the EU,” stated Eve Geddie, Head of Amnesty International’s European Institutions Office. “By failing to ensure the Egyptian authorities adopt clear benchmarks for human rights and rule of law as a pre-condition for funding, the EU is breaking its own rules.”
