EU approves additional €1 billion aid package for struggling Egyptian economy

The EU announced a €1 billion ($1.06 billion) aid package, following an €8 billion ($8 billion) deal finalized in March 2024.

This latest tranche is part of a larger €5 billion ($5.31 billion) loan program contingent on approval by EU member states. The funds are intended to address Egypt's worsening economic situation, particularly in light of recent regional conflicts and the global impact of the war in Ukraine.

The EU will provide the financial assistance as a single loan installment. However, the commission emphasized that continued progress towards democratic reforms and respect for human rights will be a precondition for future aid.

Egypt is grappling with its most severe economic crisis in decades, triggered by the COVID-19 pandemic and the ongoing war in Ukraine.

The ongoing Israeli genocide in Gaza, the disruption of marine traffic in the Red Sea, and the war in Ukraine have exacerbated Egypt's economic vulnerabilities. The country relied heavily on imports from the Black Sea region, including wheat and fertilizer. Disruptions due to the war have resulted in inflation and shortages.

The EU's support follows a series of efforts to bolster Egypt's economy. In March, the International Monetary Fund revamped its support program to €7.4 billion ($8 billion) with certain conditions. Additionally, the United Arab Emirates pledged a $35 billion investment deal in February. (ILKHA)