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EU announces $8 billion aid package for Egypt as concerns mount over migration

The aid package includes both grants and loans over the next three years for the Arab world’s most populous country

Published: Sun 17 Mar 2024, 8:24 PM

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  • AP

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Abdel Fattah El Sisi meets European Commission president Ursula Von der Leyen, at the Presidential Palace in Cairo. — AP

Abdel Fattah El Sisi meets European Commission president Ursula Von der Leyen, at the Presidential Palace in Cairo. — AP

The European Union on Sunday announced a 7.4 billion-euro ($8 billion) aid package for cash-strapped Egypt as concerns mount that economic pressure and conflicts in neighbouring countries could drive more migrants to European shores.

The deal, which drew criticism from rights groups, was signed on Sunday afternoon in Cairo in a ceremony attended by Egyptian President Abdel Fattah El Sisi, European Commission President Ursula von der Leyen and leaders of Belgium, Italy, Austria, Cyprus and Greece.

El Sisi met separately with von der Leyen and other European leaders before the signing ceremony on Sunday afternoon.

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The aid package includes both grants and loans over the next three years for the Arab world’s most populous country, according to the EU's mission in Cairo. Most of the funds — 5 billion euros ($5.4 billion)— are macro-financial assistance, according to a document from the EU mission in Egypt.

The mission said that the two sides have promoted their cooperation to the level of a “strategic and comprehensive partnership,” paving the way for expanding Egypt-EU cooperation in various economic and non-economic areas.

El-Sisi's office said in a statement that the deal aims to achieve "a significant leap in cooperation and coordination between the two sides and to achieve common interests".

The deal, known as the Joint Declaration, aims among other things to promote “democracy, fundamental freedoms, human rights, and gender equality,” according to the European Commission. Both sides will also deepen their cooperation to address challenges related to migration and terrorism.

The EU will provide assistance to Egypt’s government to fortify its borders, especially with Libya, a major transit point for migrants fleeing poverty and conflicts in Africa and the Middle East. The 27-nation bloc will also support the government in hosting Sudanese who have fled nearly a year of fighting between rival generals in their country. Egypt received more than 460,000 Sudanese since April last year.

The deal comes amid growing concerns that Israel's looming ground offensive on Gaza's southernmost town of Rafah could force hundreds of thousands of people to break into Egypt's Sinai Peninsula. The Israel-Hamas war, now in its sixth month, have pushed more than 1 million people to Rafah.

Egypt says there are 9 million migrants, including about 480,000 who are registered refugees and asylum-seekers with the UN refugee agency. Many of those migrants have established their own businesses, while others work in the huge informal economy as street vendors and house cleaners.

For decades, Egypt has been a refuge for migrants from sub-Saharan Africa trying to escape war or poverty. Egypt is a destination and a haven for some, because it's the closest and easiest country for them to reach. For others, it's a point of transit before attempting the dangerous Mediterranean crossing to Europe.

While the Egyptian coast has not been a major launching pad for people smugglers and human traffickers sending overcrowded boats across the Mediterranean to Europe, Egypt faces migratory pressures from the region, with the added looming threat that the Israel-Hamas war will spill across its borders.

The deal would inject much-needed funds into the Egyptian economy which has been hit hard by years of government austerity, the coronavirus pandemic, the fallout from Russia’s full-scale invasion of Ukraine, and most recently, the Israel-Hamas war in Gaza.

Egypt reached a deal with the International Monetary Fund earlier this month to increase a bailout loan to $8 billion, up from $3 billion, after marathon negotiations. The deal with the IMF was combined with economic reforms that included the flotation of the Egyptian pound and a sharp raising of the main interest rate.



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