by Sebastien GOULARD
On 17 March, 2024, the President of the European Commission, Ursula von der Leyen, visited Egypt where she met with President Abdel Fatah al-Sisi to sign a strategic and comprehensive partnership between the European Union and Egypt.
Accompanied by Cypriot President Nikos Christodoulides, Belgian Prime Minister Alexander de Croo, Greek Prime Minister Kyriakos Mitsotakis, and Italian Council President Georgia Meloni, Ursula von der Leyen held discussions with the Egyptian President on economic and political relations, the migrant issue, as well as energy.
The Strategic and Comprehensive EU-Egypt Partnership
Egypt is a major partner of the European Union. Its position between Africa, the Levant, and the Arabian Peninsula, as well as the Suez Canal, makes it a strategic regional actor in commercial exchanges between Europe and Asia. As the most populous country on the southern shore of the Mediterranean, it is also an important market for European companies.
The new partnership signed between Brussels and Cairo demonstrates “the European Union’s commitment to supporting Egypt’s stability” and it follows on from various previous initiatives. In 2001, Egypt signed an association agreement with the European Union for greater economic cooperation between the two regions, which entered into force in 2004. An action plan to strengthen relations between the EU and Egypt was signed in 2007.
In 2022, new priorities for the EU-Egypt partnership were adopted in the areas of economic development, foreign affairs, and support for Egypt’s stability.
The new plan presented in March 2024 is another step in the development of relations between the European Union and Egypt, at a time when both regions face significant challenges.
This plan, totalling 7.4 billion euros in value, includes three main components. Firstly, the European Union offers 5 billion euros in loans to Egypt for macroeconomic assistance, thus helping Cairo respond to the country’s economic crisis and ensure its stability. The European Union also commits to finance investments totalling 1.8 billion euros under the economic and investment plan for the southern neighbourhoods. These investments aim to accelerate Egypt’s energy transition, develop connectivity between the two shores of the Mediterranean – notably through the MEDUSA submarine cable project, strengthen Egypt’s food security by developing its cereal storage capacity, and encourage ecological transition by creating new infrastructure in the environmental sector. Additionally, 600 million euros will be provided to Egypt through various programmes, notably to combat illegal immigration.
Six Priorities for the EU-Egypt Partnership
This new strategic and comprehensive partnership between the European Union and Egypt defines six priorities.
The first is to enhance political relations between the two regions. For Europe, Egypt’s stability is a priority in its Middle East policy. This also involves respecting human rights.
For the European Union, Egypt’s economic stability is another focus of this partnership. Europe remains the largest investor in Egypt and its largest trading partner. Any economic weakening would threaten the interests of European companies in the country.
A fourth point of this partnership regards emigration to Europe. It aims to combat human trafficking and illegal migration while promoting “legal” mobility between the two regions. Egypt hosts nearly 8 million refugees, from Syria but also from the Horn of Africa and Sudan. The European Union is assisting Egypt in managing these flows and limiting the number of migrants crossing the Mediterranean to European shores.
Egypt and the European Union have also committed to increasing their exchanges on terrorist risks and collaborating against organized crime.
Finally, another sector covered by this partnership is education and research. Egypt already benefits from access to the Erasmus+ and Horizon Europe programmes. The aim is to strengthen this cooperation and to increase the number of project partnerships between European and Egyptian institutions.
Energy at the Centre of the EU-Egypt Partnership
One dimension of this partnership concerns energy. Egypt is a major partner on which the EU can rely to reduce its energy dependence on Russia. Since the war launched by Moscow against Kiev, the European Union has been seeking to reduce its gas imports from Russia. Egypt, due to its strategic position, can facilitate this change. However, for this to happen, the European Union needs regional stability in the Middle East to ensure the security of gas and oil imports from the Arabian Gulf. The crisis in Gaza following Hamas’ attacks on Israel makes it more important than ever for the European Union to support Cairo in promoting regional dialogue.
The Economic Crisis in Egypt
Egypt is facing a difficult situation. Economically, the country is experiencing high inflation that is expected to continue in the coming months due to the devaluation of its currency, decided upon in March 2024. This is an austerity measure advocated in negotiations with the International Monetary Fund for an $8 billion loan. Among the measures discussed is also the end of certain privileges granted to state-owned enterprises. Egypt’s economic situation has worsened with the crisis in Gaza, a consequence of the violent attacks by Hamas terrorists on 7 October, 2023. The slowdown in traffic in the Red Sea has halved revenues from Suez Canal crossings. Tourism, an important sector of the Egyptian economy, has also been affected by tensions in the Middle East, although tourism has not been directly targeted so far. In the month following the 7 October attacks, reservations in Egypt decreased by 25%. Cairo also fears an influx of refugees from Gaza, which would further destabilize its economy. The country strengthened its border between Sinai and the Gaza Strip in February 2024.
The partnership signed with the European Union is seen as an instrument that would enable Egypt to withstand the current crisis.
The EU-Egypt Strategic and Comprehensive Partnership demonstrates the interdependencies between the two regions and the need for Europe to have a stable partner south of the Mediterranean. Faced with Egypt’s economic crisis and regional tensions in the Middle East, Brussels must continue to strengthen cooperation with Egypt. It is important to note that the partnership adopted in March 2024 concerns not only government agencies: universities and research institutes are also involved. This opens up new perspectives, especially for European companies wishing to develop new projects with Egypt despite the risks associated with the current crisis.
Author: Dr. Sebastien Goulard is the founder and editor-in-chief of Global Connectivities.
