Ahmed Kamel – Egypt Daily News
In a significant development marking a new chapter in Egypt-European Union relations, Egypt and the European Union have signed a memorandum of understanding for a €4 billion second tranche of financial support. The deal, part of a broader strategic partnership agreement, aims to bolster Egypt’s ongoing economic reform efforts through a mix of grants and concessional loans.
The agreement was signed in Brussels between European Commission Executive Vice President Valdis Dombrovskis and Egypt’s Minister of Planning and Economic Development, Dr. Rania Al-Mashaat. The new funding is part of a broader €7.4 billion cooperation package announced in March 2024, which spans from 2024 to 2027.
This multi-year package includes €600 million in grants €200 million of which are earmarked for migration support €5 billion in concessional loans, and €1.8 billion in additional investments under the joint economic and investment plan. The focus areas of this strategic cooperation include energy, food security, green transformation, and the water-food-energy nexus initiative.
Notably, the cooperation extends into the digital transformation sector through projects like the Medusa subsea cable, the largest of its kind in the Mediterranean. Developed by Telecom Egypt, the cable will link the Red Sea and the Mediterranean through Egyptian territory. It is expected to enhance interconnectivity between European and North African telecommunications networks and reinforce Egypt’s role as a regional data transit hub.
A New Economic Roadmap: Highlights from the First Egypt-EU Economic Forum
The announcement of this financial package coincided with President Abdel Fattah El-Sisi’s participation in the first Egypt-EU Summit held in Brussels. The event was attended by European Commission President Ursula von der Leyen, senior EU officials, and key stakeholders from both Egyptian and European business communities.
During the economic forum that ran alongside the summit, President El-Sisi emphasized that this event represents a milestone in the path toward a deeper and more strategic partnership with the EU. He reiterated Egypt’s commitment to fostering stronger economic ties and elevating the relationship to a comprehensive strategic level, a commitment originally articulated in March 2024.
The president highlighted several key messages in his address:
- The EU remains Egypt’s largest trading and investment partner, accounting for approximately 27% of Egypt’s foreign trade and 32% of foreign direct investment stock in 2024.
- Discussions are underway to establish a European investment corridor in Egypt, serving as a gateway to African and Arab markets.
- Egypt is actively working to integrate more deeply into European supply chains and has reaffirmed its dedication to empowering the private sector as a driver of development.
President El-Sisi also underscored the steps Egypt has taken to stabilize and reform its economy. These include implementing a flexible exchange rate system, which has been praised by international financial institutions, and initiating structural reforms that led to improved credit ratings and a GDP growth rate of 4.4% in the final quarter of FY 2024/2025.
Egypt continues to work closely with the International Monetary Fund and is committed to the State Ownership Policy Document, which defines the framework for state-owned enterprises. Additionally, the government is moving forward with a privatization program to increase private sector participation in economic activity.
Strategic Advantages and a Call for Deeper Investment
President El-Sisi made a compelling case for Egypt as a strategic investment destination, noting the country’s location as a natural logistics hub connecting Europe, Africa, and the Arab world. With access to over 1.5 billion consumers, Egypt offers a range of competitive advantages, including tax incentives, ease of profit repatriation, a young and skilled workforce, affordable energy, and a stable political environment.
To facilitate greater cooperation, Egypt and the EU have launched a joint investment platform designed to stimulate European investment flows into the country. The president invited European investors to view Egypt not just as an emerging market, but as a reliable production partner and industrial ally.
He also emphasized the urgency of restructuring supply chains in light of global trade disruptions and positioned Egypt as a viable partner to help Europe diversify sources and enhance competitiveness.
Finally, President El-Sisi issued a call to action to EU institutions and member states:
- Expand guarantee and insurance tools to support European investors in Egypt.
- Encourage technology transfer and industrial localization to create mutually beneficial opportunities.
- Engage directly with Egypt’s investment environment by visiting the country and exploring its offerings on the ground.
A Shared Vision for Regional Stability and Growth
Both Egypt and the European Union are looking to this partnership not just as an economic alliance, but as a pathway toward broader regional stability. By deepening investment ties and fostering mutual economic growth, the partnership aims to build a more balanced regional economy, support sustainable development in the southern Mediterranean, and enhance the global standing of European businesses in rapidly growing markets.
As the EU and Egypt move into this new phase of cooperation, the foundation has been laid for a relationship grounded in shared interests, long-term vision, and actionable commitments.
President Sisi’s speech
“In the Name of Allah the Most Merciful the Most Compassionate”
Mrs. Ursula von der Leyen
President of the European Commission,
Honorable Commissioners and Ministers,
Ladies and Gentlemen,
I would like to express my pleasure to be in Brussels today and to participate in the closing ceremony of this significant economic event. This event represents a new milestone in the partnership between Egypt and the European Union, as it coincides with the first summit between Egypt and the European Union.
I extend my appreciation to everyone who contributed to organizing this event and enriching the substantive discussions throughout the day. The discussions reaffirmed the weight of the economic partnership between Egypt and the European Union, which is Egypt’s top trade and investment partner, accounting for approximately 27% of Egypt’s foreign trade in 2024. European Union investments in Egypt also represented approximately 32% of foreign direct investment (FDI) in Egypt in 2024.
The discussion topics during the sessions covered an array of strategic themes, ranging from studying the establishment of a European investment corridor in Egypt, serving as a gateway to African and Arab markets, to ideas on deepening Egypt’s integration into European supply chains, and an in-depth examination of the role of the private sector and the Egyptian state’s commitment to supporting it as a key engine for development. The topics reflect the deep and multifaceted economic and trade relations between the two sides, and our shared interest to further advance them in the coming years.
Ladies and gentlemen,
This economic event did not materialize overnight but was rather a development of an escalating process that began in March 2024 with the declaration of our joint decision to elevate relations between Egypt and the European Union to the level of comprehensive strategic partnership. This announcement was made during a high-level visit to Cairo by Mrs. Ursula von der Leyen, President of the European Commission, and the leaders of Belgium, Italy, Greece, Cyprus, and Austria. This was followed by Her Excellency’s participation in the opening of the first Egyptian-European Investment Conference in June 2024. These two visits demonstrated a clear political will to forge a balanced and ambitious relationship based on mutual interests. The events we are witnessing today demonstrate that vision in action.
On my first visit to Brussels, following this major development in the relationship between the two sides, I am pleased to express my deep appreciation to Ms. von der Leyen, President of the European Commission, who played a pivotal role in advancing this cooperation. In this context, I reiterate that we reciprocate this European commitment by working tirelessly to strengthen this strategic partnership on a practical and sustainable basis.
Ladies and gentlemen,
Today, we are on the threshold of a new phase in the path of economic cooperation between Egypt and the European Union, a phase that requires a broader vision and greater ambition, amidst the unprecedented developments our region and the wider surrounding have witnessed in recent years. I am firmly convinced that Egypt today represents a real and tangible opportunity for the European business community, not just a partner that shares geographical proximity.
In this regard, allow me to share with you a number of facts:
First: The Egyptian government has adopted a series of measures as part of its economic reform program, which resulted in the upgrade of Egypt’s credit rating by major international credit rating agencies. These agencies, along with the International Monetary Fund, commended Egypt’s adherence to a flexible exchange rate. This is in addition to an increase in foreign direct investment inflows and a rise in the annual growth rate during the last quarter of fiscal year 2024/2025 to 4.4%, compared to 2.4% in fiscal year 2023/2024. This reflects the resilience of the Egyptian economy, despite regional and international challenges and crises.
I affirm that Egypt will continue its efforts in this regard, in cooperation with the International Monetary Fund, out of its commitment to implementing the reform program and making progress in its development process. Egypt is also committed to implementing the State Ownership Policy Document, which defines the general framework for the operation of government and state-owned companies, as well as implementing the IPO program, with the aim of increasing the private sector’s contribution to economic activity.
Second: Egypt’s strategic location allows European companies to access more than 1.5 billion consumers in Africa, the Arab region, and the European Union itself, due to a broad network of free trade agreements, the Egyptian-European Association Agreement, its prime location on waterways and land trade routes, and its advanced infrastructure.
Third: Egypt offers an integrated system of incentives for investors, including tax exemptions, easy repatriation of profits, the availability of low-cost, skilled labor, and competitively priced energy, in addition to security and political and institutional stability.
Fourth: The Egyptian-European investment platform was launched to serve as a practical tool for stimulating European investments in priority sectors and creating opportunities for public-private partnerships, in accordance with national development priorities and European areas of expertise.
Therefore, I affirm the Egyptian state’s commitment to continuing dialogue with the European business community to understand its goals and overcome any challenges that may hinder its investments.
I call upon you to view Egypt not only as a promising consumer market, but also as a reliable production partner that can host European production lines that serve global and European markets efficiently and at competitive costs.
Ladies and gentlemen,
The need to restructure supply chains in our two regions is more pressing than ever, in light of the challenges of global trade, energy crises, and fluctuating maritime security. Egypt can be the industrial and technological ally Europe needs to secure its supplies, diversify its sources, and enhance its international competitiveness.
We call for an investment partnership based on mutual benefit, as Egypt offers real opportunities in strategic sectors such as pharmaceuticals and vaccines, traditional and electric automotive manufacturing, fertilizers and petrochemicals, new and renewable energy, especially green hydrogen, microchips and Artificial Intelligence, defense industries, and logistics and transportation infrastructure.
I assure you that your investments in Egypt will not only generate financial returns, but will also contribute to building a more balanced regional economy, support stability in the southern Mediterranean, and strengthen the position of European companies in rapidly and continuously expanding markets.
Ladies and gentlemen,
I invite you from this platform to visit Egypt and experience firsthand the stimulating investment environment and gain insight into the real investment opportunities, encouraging incentives, and serious guarantees it offers.
I also call on the European Commission to expand the guarantee and insurance tools for European investors in the Egyptian market. I also call on the European governments to support technology transfer and the localization of joint industries, to serve the interests of all.
Let this event be the starting point for fruitful cooperation and a better future.
Thank you very much
