European firms sign $42.85B deals with Egypt to bolster economy
Egyptian President Abdel Fattah al-Sisi meets with European Commission President Ursula von der Leyen at the Ittihadiya presidential palace in Cairo, Egypt, March 17, 2024, in this handout picture courtesy of the Egyptian Presidency. (The Egyptian Presidency-Reuters)
European firms are signing deals potentially worth over €40 billion ($42.85 billion) with Egyptian partners, the EU Commission chief told an investment conference in Cairo Saturday, part of a drive to bolster Egypt’s fragile economy.
The announcement by Commission President Ursula von der Leyen of over 20 new deals or MOUs follows a €7.4 billion ($7,93B) EU funding package and an upgraded relationship unveiled in March, as Egypt tried to contain spillover from conflicts in Gaza and Sudan and European states pushed to prevent migrant flows across the Mediterranean.
Human rights groups have questioned the financing for Egypt, where President Abdel Fattah al-Sisi has overseen a sweeping crackdown on political dissent for more than a decade.
European officials say they want to help Egypt become more resilient by boosting investment and the private sector after repeated shocks, including the fallout from the war in Ukraine and COVID-19, exposed underlying economic weaknesses.
“Your stability and your prosperity are essential for an entire region,” von der Leyen said in a speech at the start of the two-day Egypt-EU investment conference.
Sisi said the conference came at a “critical time” in light of successive international and regional crises requiring coordination between Europe and Egypt.
Speakers at the event focused on Egypt’s strategic location between Europe, the Middle East, and Africa and its potential for exporting clean energy and providing inexpensive skilled labor for European companies looking to “nearshore,” or base operations close to home markets.
About half of the deals being signed were in the energy sector, said Ditte Juul Joergensen, director general of the European Commission’s energy department.
European companies looking to invest were also in sectors including water management, construction, chemicals, shipping and aviation, von der Leyen said.
Windfall
Egypt has received a windfall of foreign financing and pledges this year from the United Arab Emirates, the International Monetary Fund, the World Bank and the EU.
That eased a long-running foreign currency crisis and prompted commitments to reforms including a more flexible exchange rate, controls on off-budget spending, and the scaling back of the powerful role of the state and the military in the economy.
Such pledges have done little to invigorate the private sector in the past. In a sign of continuing challenges, Egypt is experiencing routine power cuts, and fertilizer and chemical plants have been halting production because of gas shortages.
Businesspeople and diplomats say there is little transparency about determining economic strategy. A new government is yet to be appointed, nearly four weeks after the resignation of the current cabinet was announced.
Egyptian officials say they are doing their best to manage external pressures and provide for a growing population of 106 million.
Von der Leyen traveled to Cairo as she sought approval from the European Parliament for a second five-year term as Commission president.
European Union leaders agreed to nominate the Germans on Thursday, but the secret ballot vote at the parliament is widely seen as a trickier proposition.
