Egypt Daily News – Egypt will obtain a European loan of one billion euros “within days,” as the European Commission decided on Friday to disburse the amount after the Egyptian government fulfilled the conditions of an agreement it signed with the European Union earlier this year, according to what the Commission announced on its website.
“Financial support will help Egypt meet part of its financing needs for the fiscal year 2024/2025, ensure the stability of its macroeconomics, and support it in implementing the reform agenda alongside the ongoing program from the International Monetary Fund,” according to the commission’s statement.
Ursula von der Leyen, President of the European Commission, indicated in a post on the “X” platform that the loan will contribute to strengthening the business environment in Egypt, promoting private investment and creating more job opportunities.
Loan terms
The decision to disburse the first and only tranche of the loan within the framework of the “Strategic and Comprehensive Partnership Agreement” signed by the two sides last June comes after the Commission concluded that Egypt had taken “measures to enhance the flexibility of its macroeconomics by unifying the exchange rate and improving the management of its public finances in conjunction with strengthening its social protection program,” according to the statement.
She added that discussions are still ongoing regarding another process worth 4 billion euros that the European Union will provide to Egypt as part of the partnership agreement.
For about two years, Egypt faced pressure on its balance of payments as a result of the Russian invasion of Ukraine and then the outbreak of fighting in Gaza. The crisis worsened as a result of its scarcity of foreign currency, which pushed the exchange rate to rise in the parallel market to a record level exceeding 70 pounds to the dollar at the end of last year, compared to about 30 pounds in the official market.
However direct investments from Abu Dhabi with a total value of $35 billion in the Egyptian Ras El Hekma city development project helped Cairo overcome the currency crisis and unify the exchange rate, which paved the way for it to reach an expanded loan agreement with the International Monetary Fund worth $8 billion.
The European Commission said in a statement today, “Egypt’s economy began to recover earlier this year following the announcement of support from the International Monetary Fund and the European Union after it faced great pressures on the balance of payments. Despite the continued recovery, the economy is still affected by the economic repercussions of Russia’s war on Ukraine and the situation in the East.” Middle”.
