The European Union (EU) is set to accelerate the disbursement of certain financial assistance to Egypt through an expedited funding procedure that circumvents parliamentary oversight and other regulatory checks, according to the president of the EU’s executive branch.
The EU has earmarked 1 billion euros ($1.1 billion) for this purpose as part of a larger aid package totaling 7.4 billion euros ($8 billion) announced on March 17.
Egypt has traditionally relied on financial support, often from wealthy Gulf Arab states. This move by the EU comes amidst concerns over economic pressures and regional conflicts potentially driving more migrants to Europe.
The assistance package includes grants and favorable loans spanning three years for Egypt, with the majority of the funds (5 billion euros/$5.4 billion) designated as macro-financial assistance (MFA) to be directly allocated to Egypt’s Central Bank.
In an unusual move, the EU is bypassing standard safeguards, citing upcoming European Parliament elections scheduled for June 6-9. European Commission President Ursula von der Leyen has proposed an urgent MFA operation of up to 1 billion euros for Egypt, citing the country’s deteriorating economic and fiscal conditions.
This expedited procedure, utilizing Article 213 of the EU treaties, requires endorsement from EU member countries but bypasses parliamentary approval.
While the remaining 4 billion euros ($4.3 billion) of MFAs to Egypt will be subject to parliamentary scrutiny after the elections, the immediate focus is on providing timely assistance to address Egypt’s urgent economic challenges.
The aid package also includes an investment plan of 1.8 billion euros ($1.9 billion) and 600 million euros ($647 million) in loans, with a portion allocated for migration management.
Despite Egypt’s sluggish progress in policy reforms, the EU views the aid as essential, particularly in the context of migration control, which remains a significant concern for EU member states.
This move underscores the EU’s commitment to supporting Egypt’s economic stability amid various challenges, including the aftermath of regional conflicts and the COVID-19 pandemic.
