Relations between the European Union (EU) and Egypt are based on the Association Agreement, which entered into force in June 2004. They have intensified over the past years to cover a wide spectrum of fields.
The ninth meeting of the Association Council of the EU and Egypt, held on June 19, 2022, adopted the new Partnership Priorities to guide the relations for the period 2021-2027. In accordance with the new Partnership Priorities, the EU and Egypt further deepen their dialogue and their co-operation around three overarching priorities: Sustainable modern economy and social development, partnering in foreign policy, and enhancing stability.
The tenth meeting of the Association Council between the EU and Egypt took place in Brussels on January 23, 2024. The event marked the 20th anniversary since the Association Agreement entered into force in 2004 and confirmed the robust and multifaceted partnership between the two parties.
Strategic partnership
During a high-profile meeting with President Abdel Fattah El Sisi on Sunday, European leaders announced a €7.4 billion ($8.06 billion) funding package and an upgraded relationship with Egypt.
This strategic partnership aims to bolster co-operation across various sectors, including renewable energy, trade, and security, while providing much-needed support for Egypt’s economy.
The financial aid package will offer a combination of grants, loans, and macro-financial assistance.
A senior EU commission official revealed that €5 billion will be allocated towards macro-financial assistance, €1.8 billion of investments, and €600 million in grants.
The macro-financial assistance includes €1 billion in emergency funding to be delivered this year.
The remaining €4 billion in macro-financial assistance is contingent upon approval by the European Parliament.
EU biggest trade partner to Egypt
The EU and Egypt are important trading partners and will work together to further enhance bilateral trade relations and foster investments. They will continue strengthening their constructive trade dialogue to further foster the business and investment environment to attract more foreign direct investment.
The EU and Egypt are keen to enhance the competitiveness of the economy and support the development of the private sector, namely Micro-, Small-, and Medium-sized Enterprises in Egypt.
In this regard, Egypt and the EU highlighted the importance of the International Investment Conference to be held in Egypt, in May 2024. Its aim will be to further deepen Egypt-EU business exchanges in order to enhance the overall business environment and to encourage European public and private investments to benefit from the available investment potentials in Egypt.
Egypt is working with the EU to boost co-operation in research and innovation in sectors such as energy, water, agro-food and health as well as in advancing digital technologies.
EU exports to Egypt were US$21.63 billion during 2022, according to the United Nations COMTRADE database on international trade.
EU’s NDICI
The Neighbourhood, Development and International Co-operation Instrument – Global Europe (NDICI) is the main instrument for EU’s co-operation with external partners, including Egypt, in 2021-2027. The instrument’s approach includes grant funding as well as blending grants with loans from European and international financing institutions.
MIP 2021-2027
The European Union’s co-operation framework with Egypt is the Multiannual Indicative Programme (MIP) for the period 2021-2027, based on the new Partnership Priorities, to support Egypt in the areas of green and sustainable development; human development, economic resilience and prosperity building through green and digital transition; social cohesion, and the development of a modern and democratic state.
For the first period of the MIP 2021-2024, €240 million has been allocated for EU bilateral co-operation with Egypt. Past support focused on education, health, urban and rural development, employment creation, development of renewable energy and energy efficiency, water management and treatment, waste management, environment, governance and public administration reform corresponding with Egypt’s Sustainable Development Strategy – Vision 2030.
Egypt also benefits from additional EU thematic programmes and instruments, including the European Instrument for Democracy and Human Rights: almost €10 million in 2021-2024.
