How do you evaluate the Egyptian-German relationship, and what are the main areas of cooperation?
Egypt is a very important partner to Germany and is a key country when it comes to stability in the Middle East region, which is why German Foreign Minister Annalena Baerbock’s first visit outside Europe and the United States was to Egypt in February. This was followed by the visit of State Secretary and Special Envoy for International Climate Action Jennifer Morgan in April. Germany is working intensively with Egypt on COP27.
Other fields of corporation include culture. There are 400,000 German speakers in Egypt, and German schools have several thousand students. The German University in Cairo has 13,000 students, and they contribute to our cultural and educational relations through training and exchange programmes.
What about business and economic relations?
The economic partnership between Germany and Egypt is both broad and well developed. Germany is currently Egypt’s second largest trading partner in Europe, with a volume of €5 billion. The volume of investment is also increasing. It reached €1.5 billion in 2020, a figure that is expected to go up tremendously after large scale agreements are signed in 2021.
We are very active in the field of energy and electricity generation, starting with Siemens 2017 investment in power plants which helped secure a surplus in electricity production in Egypt. There are other investments in wind and solar power, and in green hydrogen, a field in which we would like to make great progress.
In the transport sector, negotiations are continuing for the second phase of the high speed train connection, a huge project that will be implemented in partnership with Siemens.
Egypt will host COP27 this year…
Climate change is at the heart of the programme of the new German government, and cooperation with Egypt in the run-up to COP27 is very important to us.
There have been many meetings between government officials from both countries to prepare for the conference. Egypt will host COP27 in November, and has been making tremendous efforts in the transition towards renewable energy, diversification of energy sources and developing new technologies like green hydrogen.
A number of memoranda of understanding have been signed by German companies to invest in green hydrogen in Egypt. There is a big demand for energy in Europe, and we need to cut imports of fossil fuel, mainly from Russia, and look for alternatives. Egypt is one of them.
What are the main investment opportunities for German businesses in Egypt, and what obstacles need to be addressed?
Cooperation covers transport and renewable energy, which we would like to expand. German companies are ready for further investment in this sector. Financial institutions like the German Development Bank (KFW) are willing to engage more with Egypt to extend our involvement in renewable energy by offering concessional loans and other financial services.
Germany is also involved in the medical and technological market and would like to increase investments in these fields.
German companies operating in Egypt (about 1,180 companies) have certain demands when it comes to facilitating business transaction. They would like to see improvements to the tax system and a simplification of import procedures and documentation.
What about German tourist inflows to Egypt given the pandemic and the Ukrainian crisis?
The war is reducing the number of tourists globally, and Egypt has been hit by decreases in the number of tourists arriving from Russia and Ukraine.
The number of German tourists to Egypt averaged around 1.8 million annually before the pandemic. The figure then fell, but is now bouncing back to around 80-90 per cent of the pre-pandemic total.
The war in Ukraine is having a devastating impact on the world economy. How is Germany coping with this, particularly when it comes to energy?
First, I would like to say that there is no justification for Russia’s war on Ukraine, and the Ukrainian government has a legitimate right of self-determination and Russia should respect that. We are all working to convince Russia to find a way out of this escalation and end the war.
Up to 50 per cent of Germany’s gas consumption and 30 per cent of its oil needs come from Russia. As the war erupted, we had to start cutting down energy imports from Russia and diversify our energy sources as fast as possible.
Germany has already reduced oil imports from Russia to 10 instead of 30 per cent and is now in favour of an oil embargo. The next step will be to reduce gas imports from Russia and find alternative supplies. Egypt is a possible future exporter, after further development of the gas fields in the Eastern Mediterranean allows for more liquefied natural gas production.
How can escalation of the war in Ukraine be avoided, and what can be done to limit its humanitarian and economic repercussions?
We don’t want any further escalation in the war. The economic repercussions are not a consequence of European sanctions, they are a result of Russian politics and positions.
We don’t want to divide the world and have a new cold war. Instead, we are doing everything to bring this war to an end and to stop humanitarian suffering, but we need a strong, legally-based world order in order to maintain peace.
NATO countries are determined to strengthen their defences and support eastern NATO members. All members are clear that we are not engaging in the war. What we are doing is being supportive of Ukraine and its right to self-defence. We are delivering certain military equipment to Ukraine but we are not part of the conflict and we don’t want to become part of it.
We are also imposing sanctions aimed at reducing Russia’s economic ability to continue the war and the threat of it spreading into neighbouring countries like Moldova.
The war is severely impacting Egypt, and Germany is willing to support Egypt in mitigating the economic effects.
The European Union is willing to give an additional €100 million to support food imports, and Germany will provide an additional €50 million to the World Food Programme for their activities in Egypt.
*A version of this article appears in print in the 12 May, 2022 edition of Al-Ahram Weekly.