Council adopts €1 billion macro-financial assistance to Egypt
The EU will provide €1 billion of urgent short-term macro-financial assistance to Egypt to help stabilise its economy.
The aid is meant to address the deteriorating macro-fiscal situation and financing needs of the country over the recent months, notably after the outbreak of the Gaza war, the Houthi attacks in the Red Sea and the repercussions of Russia’s war of aggression against Ukraine.
The €1 billion of short term assistance is part of a package of two proposals to provide macro-financial assistance to Egypt. The second part of the operation, still to be adopted, would provide € 4 billion over the period 2024-2027.
The overall macro-financial assistance accompanies a revamped support programme concluded with the International Monetary Fund (IMF), of up to € 8 billion, which will be made available provided several conditions are met.
The macro-financial assistance will be provided in the form of loans made available in one instalment. A precondition for granting the assistance is that Egypt continues to make concrete and credible steps towards respecting effective democratic mechanisms (including a multi-party parliamentary system) and the rule of law and guaranteeing respect for human rights.
Next steps
The decision will enter into force on the day following that of its publication in the Official Journal of the EU.
Background
On 15 March 2024, the Commission proposed a macro-financial assistance operation to Egypt for an overall amount of € 5 billion in loans, following the request of Egypt on 12 March 2024.
The proposed macro-financial assistance would provide € 1 billion in the short-term and € 4 billion over the period 2024-2027. The differentiated approach aims to make it possible to disburse the first part of the aid before the end of 2024, to respond to Egypt’s urgent financing needs.
In accordance with the Financial Regulation, the loans would be provisioned in the EU budget at a rate of 9 % (€ 90 million) under the Neighbourhood, Development and International Cooperation Instrument – Global Europe (NDICI – Global Europe).