On the 17th of March, the European Union and the Arab Republic of Egypt have “mutually agreed to elevate their relationship to the level of a strategic and comprehensive partnership”, based on the Joint Declaration signed by the parties.
The crowded European delegation counted not only on the presence of the President of the European Commission Ursula Von der Leyen, but also saw the participation of EU leaders from Italy, Austria, Belgium, Cyprus and Greece. The Strategic Partnership Document identifies specific areas of cooperation, focusing on macroeconomic stability, migration, sustainable investment and security.
Beyond the acknowledgements of mutual respect and the appraisal towards what the EU describes as a “reliable partner, as well as a pillar of security, moderation, and peace in the region of the Mediterranean”, the Partnership took the form of a massive flow of money to Cairo from European institutions, mobilizing up to 7.4 billion euros. Specifically, the strategic partnership includes 5 billion euros in low-interest loans to support macroeconomic reforms, 600 million in grant funding, and 1.8 billion in additional investments. In addition to that, Egypt has asked the International Monetary Fund for its fourth loan since 2016. The reasons provided are more geopolitical than structural in nature: on top of ever-pending significant macroeconomic challenges, Egypt had recently to deal with the impact of the recent conflict in Gaza and the Suez Canal crisis, hence the request for an augmentation of IMF support to Egypt from US$ 3 billion to US$ 8 billion. In return, the country agreed to devalue its national currency, introduce a floating exchange rate, slow infrastructure spending and preserve debt sustainability.
On economic stability, the European Union stood firm on the same principles that are enshrined in its foreign policy towards the neighboring countries: the financing will support long-term macro-economic stability and sustainable economic growth, in order to unlock the full potential of private sector investment. This first segment of financing is planned to be complementary to the one provided by the IMF.
European investments for 5 billion euros, supported by guarantees under the European Fund for Sustainable Development and Economic Investment Plan, are destined to enhance sustainable development, investing in Egypt’s renewable energy sector. This particular sector is vital for the EU, permanently concerned with energy security matters, especially after the global crisis sparked after the cut of Russian gas and the disruption of supply chains that followed. In this perspective, investment in the energy sector is set to facilitate trade and investment flows in line with Egypt’s international obligations, in particular those in relation to the EU.
But the migration issue is also central in the Strategic Partnership. 200 million euros are granted specifically for flow management, “combating smuggling of migrants and trafficking in persons, strengthening border management, and ensuring dignified and sustainable return and reintegration”.
The logic behind this allocation seems to be broader than just money in exchange for effective border control. Although the countries given the most attention by the EU on the migratory issue have been Libya and Tunisia, in March 2022, the number of Egyptian nationals applying for asylum in EU+ countries reached its highest levels since 2014, according to the EU Agency for Asylum: over the first quarter of 2022, EU+ countries received a total of 3480 asylum applications lodged by Egyptian nationals, a 338 % increase compared to the first quarter of the previous year, and most Egyptian nationals who travel irregularly to the EU+ do so by boat along the Central Mediterranean route to Italy.
Italian Prime Minister Giorgia Meloni took advantage of the bilateral meetings with Al Sisi to advance the government’s agenda in pursuing strong bilateral relations with States bordering the southern shore of the Mediterranean -last year, similar efforts were directed towards Tunisia. Specifically, Meloni and Al Sisi signed 10 memoranda within the framework of Piano Mattei, the Italian government’s strategy to establish cooperation for development with African countries, in which Egypt serves as a fundamental pillar.
The influx of liquidity and money into Egypt offers a short-term respite, potentially bolstering immediate economic stability. However, this influx rather demands meticulous structural management to avert long-term repercussions. While such financial support, particularly from entities like the European Union, aims to alleviate immediate economic strains, it inadvertently perpetuates a pattern of relying on external aid to maintain stability. This strategy echoes a recurrent theme where temporary relief measures overshadow the necessity for addressing fundamental structural issues. The cardinal concept of European economic policy sees economic stability as a catalyzer for solutions to deeply ingrained problems, but with this approach, issues such as stalling politics, the perpetuation of an authoritarian regime, the repression of dissent, and objectionable migration management may end up being overlooked or misinterpreted. Without proactive steps towards addressing these underlying structural deficiencies, the cycle of dependency on external assistance persists. Consequently, while short-term relief is crucial for mitigating immediate crises, a comprehensive approach that is tailored to Egypt’s characteristics and socioeconomic parameters may be preferable in addressing the root causes of Egypt’s challenges.
Please read the following for more information:
https://www.presidency.eg/en/قسم-الأخبار/أخبار-رئاسية/news-1732024-11/
Nice information thanks for sharing…