The European Union pledges 1 billion euros ($1.07 billion) in short-term financial aid to Egypt to support its economy.

The European Union has pledged to provide an amount of €1 billion of urgent short-term financial aid to Egypt to help stabilise the economic landscape of the region. The aid by the EU is part of a larger package of 5 billion euros in loans and an additional amount of 4 billion euros scheduled for long-term assistance starting from the year 2024 to 2027. The Egyptian government is required to demonstrate tangible progress in upholding democratic principles and respecting human rights as a precondition for receiving financial support. The European Union provided Egypt with financial assistance in order to support the country’s economy, as per the media reports and articles. The recent aid seemingly falls in the broader concept of the EU as an initiative to stabilise Egypt’s current economic situation, which is hampered by persistent foreign currency shortages and other challenges. 

Previously, the Egyptian government had indulged in a comprehensive support program organised by the International Monetary Fund, totalling a value of $8 billion and also secured a significant agreement with the European Union, which aimed at improving cooperation and tackling the increasing migration issues faced.

On 15 March 2024, the Commission proposed a macro-financial assistance operation to Egypt for an overall amount of € 5 billion in loans, following the request of Egypt on 12 March 2024. Under the Financial Regulation, the loans would be provisioned in the EU budget at a rate of 9 % (€ 90 million)  under the Neighbourhood, Development and International Cooperation Instrument – Global Europe (NDICI – Global Europe).

The recent aid which was urgent and a macro-financial aid package of 1 billion euros seemingly falls under the part of a larger 5 billion euro loan package. On top of that, there are multiple strategic plans of investing 4 billion euros in the coming longer-term financial assistance starting from 2024-2027, which are awaiting approval and permission from the EU’s 27 member states.

The current aid is aimed at providing assistance to address problems in Egypt such as its fiscal challenges, particularly in the wake of recent events such as the Gaza conflict, attacks by Houthi forces in the Red Sea, and the fallout from Russia’s aggression against Ukraine, as per the media articles and the reports alike. 

However, financial aid comes along with certain terms and conditions: Egypt must demonstrate progress and uphold its democratic principles, including the establishment of effective democratic mechanisms such as a multi-party parliamentary system, adherence to the rule of law, and respect for human rights. 

About the European Union or the EU

The European Union (EU) is a supranational political and economic union of 27 member states that are located primarily in Europe. The Union has a total area of 4,233,255 km2 (1,634,469 sq mi) and an estimated total population of over 448 million. The EU has often been described as a sui generis political entity (without precedent or comparison) combining the characteristics of both a federation and a confederation.