Egypt and the European Union.. What is behind “billion-dollar financing”?

On Sunday evening, the European Union signed agreements worth 7.4 billion euros, equivalent to ($8.06) billion, with Egypt over a period of four years in various fields, including loans, aid, and investments, according to what Agence France-Presse and Reuters reported, citing a senior European official.

The financing includes financial aid amounting to five billion euros, investments worth 1.8 billion euros, and grants amounting to 600 million euros. In 2024, emergency funding of one billion dollars will be disbursed as part of financial aid.

“Comprehensive” strategic partnership

Speaking to Al-Hurra website, the head of the Plan and Budget Committee of the Egyptian House of Representatives, Fakhri Al-Feki, reveals that “an amount of one billion euros will be disbursed immediately.”

The agreement aims to enhance cooperation in areas including renewable energy, trade and security, while providing grants, loans and other forms of financing over the next three years to support the faltering Egyptian economy.

The agreements fall within the framework of a “comprehensive strategic partnership” between the European Union and Egypt, of which 4 billion euros will be included in the economic reform program financed by the International Monetary Fund, according to El-Feki.

He refers to the “economic, commercial, technological, and military” cooperation and partnership between Egypt and major countries in the European Union, led by Germany and France.

During the United Nations Climate Change Conference (COP27) in Sharm El-Sheikh, Egypt, the European side expressed support for renewable energy projects and green investments, and is fulfilling commitments made during the summit, according to El-Feki.

What’s behind the financing?

European governments have long been concerned about the risk of instability in Egypt, a country of 106 million that struggles for foreign currency and where economic hardship has prompted increasing numbers to emigrate in recent years.

Economist Abdulnabi Abdulmutallab points out that the funding is linked to the European Union’s approval of its “annual budget,” which has not yet been approved.

If the funding is implemented on the ground and is not just “promises” as happened previously in 2011, it is clear that the European Union is suffering from major problems due to the escalation of the situation in the Middle East region, according to his talk to the Al-Hurra website.

The war in Gaza is causing great concern to the European Union, and there are European fears of “the return of irregular migration flows” to the continent, according to Abdulmutallab.

Because of this, the European Union countries provide support that ensures the stability of the countries of the Middle East, especially the critical region “Palestine-Jordan-Egypt,” according to the economic expert.

“Geopolitical and geostrategic” importance?

With a population of 106 million, “Egypt is the demographically largest Arab country and the third largest in Africa.

Egypt hosts an estimated nine million foreign residents, including four million Sudanese and 1.5 million Syrians, according to the United Nations International Organization for Migration.

Speaking to Al-Hurra website, the strategic expert, Saad Al-Zant, points out that “European leaders realize the importance of keeping Egypt stable on all security, political, and economic levels.”

The problems of illegal immigration threaten “Europe’s security,” and the energy and trade crisis, especially those passing through the Suez Canal, constitute a real threat to the European economy, according to Al-Zant.

He points out that the European Union countries realize and appreciate, in return, the depth and seriousness of the threats surrounding Egypt, which represent a danger from all its strategic directions.

In a related context, political economy researcher, Abu Bakr El-Deeb, talks about the “geopolitical” and “geostrategic” importance of Egypt.

Egypt is a large and powerful country that maintains the stability of the Middle East, and at the same time, any crises in the region mainly reflect negatively on Europe, according to his interview with Al-Hurra website.

El-Deeb explains that Egypt is “a major and important energy corridor,” and this applies to Egyptian natural gas, or energy coming from the Middle East.

Any instability in the Egyptian lands or its regional neighborhood will lead to millions of illegal immigrants flowing into the Old Continent. Therefore, Europe is keen on Egypt’s “security and stability” as a European strategic interest, as the political economy researcher explains.

Al-Faqi agrees with the previous proposal and says: “Europe knows well what it is doing… and provides funding and support to Egypt… because it knows well its important role in the region.”

Egypt is a fundamental pillar of stability in the Middle East, and thus the stability of the European continent, according to the Chairman of the Plan and Budget Committee in the House of Representatives.

What does it have to do with Libya?

There is an increase in the number of Egyptians trying to reach Europe via Libya, and the European Union is already providing funding aimed at reducing these flows, and Egypt has been working to largely prevent illegal migration from its northern coasts since 2016.

In the past few months, the Greek islands of Crete and Gavdos have witnessed a sharp rise in the number of migrant arrivals, most of them from Egypt, Bangladesh and Pakistan, increasing pressure on ill-equipped authorities and raising fears of a new smuggling route in the Mediterranean.

Al-Fiqi confirms that Egypt is successful in controlling its borders and preventing “illegal immigration” to Europe, but the coasts of Libya are open to European territory.

Divisions prevail in Libya and there is no “strong state,” and thus the country is “unable to control its borders,” as the head of the Plan and Budget Committee explains.

Al-Fiqi points out that there is movement of individuals between Egypt and Libya, and “lineage and affinity” relations between the Egyptian and Libyan tribes, which are two neighboring countries, and therefore “the borders between the two countries cannot be closed.”

Despite this, Egypt is trying to “control” the border with Libya and prevent the leakage of illegal immigrants, he added.

What is the relationship to the war in Gaza?

Egypt is the main conduit for international humanitarian aid sent to Gaza, and is trying, along with Qatar and the United States, to broker a truce between Israel and Hamas.

Al-Fiqi explains that Egypt made a great effort to prevent “the expansion and expansion of the scope of the war in Gaza,” and did not get drawn into the conflict there and took a “rational position.”

Since the first day of the war in Gaza, Egypt has rejected the “forced displacement” of Palestinians and the liquidation of the Palestinian cause, according to the Chairman of the Plan and Budget Committee of the Egyptian Parliament.

In a related context, Al-Deeb points out the importance of the Egyptian role in trying to stop the war in Gaza, achieving stability and providing aid to the residents of the Strip, as well as intervening to mediate an attempt to “ceasefire.”

Therefore, a helping hand must be extended to Egypt, which plays an important role in the Gaza Strip, according to the political economy researcher.

For his part, Al-Zant stresses that five months after the “Gaza War,” the repercussions of the war threaten international peace and security, with the “closest region” being Europe at the forefront.

European support for Egypt ultimately targets the interests of the Union countries first, and Europe aims to ensure the stability of Egypt, as “a country that represents the center and axis of the region,” according to the strategic expert.