The European Union (EU) stressed its ongoing support for Egypt this week amid the challenging situation on the global and regional levels, saying that Egypt’s role in the region is paramount and critical for the stability of the Middle East and North Africa (MENA) region.

The remarks were made during a press conference following the 10th meeting of the EU-Egypt Association Council that kicked off in Brussels this week to mark the 20th anniversary of the association agreement between the two sides. 

The meeting came amid significant global and regional tensions, with the repercussions of the Russia-Ukraine conflict and the Hamas-Israel war severely impacting the Egyptian economy. 

The discussions highlighted the fact that Egypt is affected by conflicts in its neighbouring countries, such as in Sudan and Libya, in addition to the escalation of the conflict in Gaza and the repercussions of the Russian war in Ukraine.

Both sides pledged to work together to enhance the competitiveness of the Egyptian economy and support the development of the private sector and particularly micro, small, and medium-sized enterprises, according to an EU statement.  

Egypt and the EU highlighted the importance of the International Investment Conference that will be held in Egypt in May this year. The cabinet is preparing the framework for this conference, and a delegation from the General Authority for Investment will visit Brussels soon to discuss the details.

The upcoming conference will provide a unique opportunity to boost the economy and generate significant interest in the business and private investors community, said EU Commissioner for Neighbourhood and Enlargement Olivér Várhelyi at a press conference following the council meeting on Tuesday.

The aim of the conference is to further deepen Egypt-EU business exchanges and to encourage European public and private investments to benefit from the available investment potentials in Egypt, the EU statement said. 

This includes the privileges provided by the Suez Canal as the most important commercial and maritime corridor connecting East and West and its capacity to strengthen Egypt’s role in EU supply chains.

The two sides are also in discussions relating to a strategic comprehensive partnership. “This new partnership will foster and enhance political dialogue, support economic and social development, and attract investments,” Várhelyi said.

A high-level EU source told Al-Ahram Weekly that the comprehensive strategic partnership will mark a groundbreaking step for the EU in its relations with its southern neighbouring countries.

 The source also emphasised Egypt’s particular significance for the EU, given its unique position in the Middle East and its substantial political and economic influence in the region. 

A comprehensive strategic partnership between Egypt and the EU would lead to the expansion of cooperation in various economic and non-economic areas.

The consultations led by Foreign Minister Sameh Shoukri with top European officials in Brussels were characterised by significant openness, notably in addressing issues related to Egypt’s economic situation. 

A recent visit by the President of the European Commission to Cairo focused on advancing the relationship between Egypt and the EU to a comprehensive agreement.

The source indicated that boosting economic ties between the parties would also result in greater political coordination between Cairo and Brussels. 

Várhelyi shed light on some of the funding that the EU has recently provided to Egypt under the agreement. 

The EU is set to inject 3.2 billion euros into the Egyptian economy from now until 2027 under the European Fund for Sustainable Development. Earlier, the EU had allocated 5.8 billion euros in the period from 2021 for various projects, mostly in the form of concessional loans at low interest rates over long terms.

The European Investment Bank (EIB), one of the EU’s financial arms, will also provide Egypt with a loan of 115 million euros to be invested in the agricultural sector, Várhelyi said. 

He said there was a lot of potential for Egypt in the energy sector, becoming not only a reliable supplier of gas but also a major source of renewable energy for the EU.

He reiterated that it has doubled its support for Egypt owing to Egypt’s hosting some 10 million refugees. Almost 50 million euros have already been deployed to this cause, Várhelyi said, acknowledging that much more would need to be done. 

“In the new partnership, we will look into ways in which we can continue to increase our support in this regard,” he explained. 

An informed source in the council stated that the EU is supporting Egypt in its negotiations with the International Monetary Fund (IMF), demonstrating the European commitment to strengthening the partnership. 

“The European Union and United States are fully supporting Egypt in the negotiations with the IMF,” the source said.

Regarding additional funding during the current crises, the source mentioned that Egypt is receiving extra funds, notably in the form of 5.4 million euros allocated to address the urgent situation on the country’s borders.

EU High Representative for Foreign Affairs Josep Borrell stressed the need to work on implementing the two-state solution to the Palestinian issue.

Calling for an immediate ceasefire in Gaza, Shoukri affirmed that Egypt and the EU will continue to collaborate to define ways that can positively impact and move this process forward. 

The scale of the devastation and loss of life in Gaza is “unacceptable” and “unprecedented”, Shoukri said, adding that the situation could not be tolerated from either a human or a political perspective. 

“To be able to deal with the ramifications of the conflict, the military activity must stop. There are various dimensions to the conflict, and we can deal with all of them. But we have to deal with them without any further loss of life,” he said.

Shoukri pointed to the inhumane conditions that the people of Gaza are suffering from as being horrendous, tragic, and painful. 

The EU-Egypt association agreement sets the general framework for cooperation between the two parties, with the Partnership Priorities Document, and is guided by the 2030 Agenda for Sustainable Development, the UN Sustainable Development Goals (SDGs), the Paris Climate Agreement, and the EU’s strategic priority of a prosperous Southern Neighbourhood.

Since the ninth meeting held in June 2022, the priorities of the partnership have been focusing on building a sustainable economy, emphasising the green and digital transition, and boosting common commitments on human rights and the rule of law.

* A version of this article appears in print in the 25 January, 2024 edition of Al-Ahram Weekly