The EU Approved Billion Dollars Aid for Egypt

The European Union approved this Friday the urgent aid of 1,000 million euros in macro-financial support for Egypt, within the framework of the agreement reached last March with Cairo for a "strategic cooperation agreement" worth 7,800 million until 2027.

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The European Union announced, in a press statement, that the first batch of the aid program, amounting to approximately $8.1 billion, “aims to help address the deteriorating financial situation and the country’s financing needs... especially after the outbreak of the virus.” The Gaza war, the Houthi attacks in the Red Sea, and the repercussions of the Russian war...”

As a precondition Egypt should continue 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," the statement added.

The financial aid program comes after the financial support agreement for Egypt from the International Monetary Fund on March 6, and was preceded by an agreement on a major investment deal worth $35 billion with the UAE, coinciding with a sharp decline in the value of the pound. A decision by the Central Bank to raise overnight deposit and lending rates by 600 basis points, which enabled faltering public finances to catch its breath.

Since then, billions of dollars have flowed into Egypt, from Arab and foreign investors, in treasury bills and bonds, which offer very high returns.