EU $6.5 billion grant dependent on Egypt IMF loan: Van Rompuy
Success of multibillion dollar IMF loan agreement prerequisite for EU's support of Egypt's ailing economy, says President of European Council at Cairo conference Thursday
Ahram Online, Friday 18 Jan 2013
European council president, Herman Van Rompuy, during a meeting with representatives of the Egyptian Federation of Chambers of Commerce (EFTA) in Cairo (Photo:Al-Ahram)
President of the European Council Herman Van Rompuy, announced that EU's $6.5 billion loan to Egypt will only be granted once the International Monetary Fund (IMF) seals its loan agreement with Egypt, during a meeting with the Federation of Egyptian Chambers of Commerce in Cairo Thursday.
European countries will continue to support the process of democratic transition, Van Rompuy said in the press statement that followed the meeting, adding that mutual trust between all parties is what will end the country's current economic crisis and political uncertainty.
"Economic reform plans that are currently being negotiated between the IMF and Egypt's government, will have a very high social cost and will be met with widespread discontent", he added.
Von Rompuy stressed though that postponement of the IMF $4.8 billion loan is not the answer, as the IMF agreement will boost investor confidence in the Egyptian economy and will open the door for further economic aid packages.
"One the IMF deal is sealed with Egypt, the EU will be supporting Egypt's economy with loans and grants worth a total of $6.5 billion," asserted Van Rompuy.
Van Rompuy added that a full-fledged EU-Egypt free trade agreement would soon be negotiated with the Egyptian government.
Its aim is to promote economic cooperation and boost investor confidence, he continued stressing that the EU represented Egypt's primary trade partner.
The Egyptian presidency announced in November that the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) will each provide $2 billion in loans.