Financial Times: EU prepares €7.4bn aid package for Egypt

The EU is readying a €7.4bn aid package for Egypt aimed at shoring up its economy, amid fears that the conflicts in Gaza and Sudan risk exacerbating financial troubles in the north African nation and raising immigration pressure on Europe.

European Commission president Ursula von der Leyen will travel to Cairo on Sunday with the Greek, Italian and Belgian prime ministers to finalise and announce the agreement.

The proposed deal is the latest in a series of EU pacts with northern African countries aimed at avoiding economic instability around Europe’s neighbourhood and halting irregular migration from Africa.

It follows other agreements with Tunisia and Mauritania that pledged money and other incentives in return for better policing of the countries’ borders, despite concerns from politicians and NGOs over human rights and the effectiveness of such arrangements.

The deal concludes months of negotiations that accelerated in the wake of the October 7 attack on Israel by Hamas militants and the subsequent war, amid fears of potential refugee movements from Gaza. But Egyptian authorities have kept their border to the enclave sealed and repeatedly rejected the idea of Israel attempting to displace large numbers of Gaza’s 2.3mn inhabitants to the Sinai peninsula.

The agreement includes support for Egypt’s energy sector and assistance to deal with the rising number of Sudanese refugees in the country.

It also pledges help to fortify Egypt’s border with Libya, from where people are crossing the Mediterranean en route to Europe, according to several EU officials briefed on the matter.

The planned package includes €7.4bn in grants and loans through to the end of 2027.

Some €1bn in emergency financial assistance could be paid immediately. Another €4bn in macro-financial assistance, tied to reforms under an expanded IMF programme under discussion, would need to be approved by EU member states.

The remainder of the package would be drawn from various EU funding streams, officials said.

An official involved in the preparations said the agreement was “substantial but strategically important”, adding: “We’re worried about two borders — the Sudan-Egypt border, where Sudanese are entering the country, and the Egypt-Libya border, where people are exiting.”

Greek migration minister Dimitris Kairidis told the FT that Egypt had played a “very critical, key role” in managing irregular migration to Europe. “We do not have direct flows out of Egypt,” Kairidis told the FT. But he added: “There are Egyptians crossing through eastern Libya.”

He said it was vital to offer Egypt, which faced “a serious economic crisis and a serious refugee crisis”, immediate support.

Last year, the International Organization for Migration recorded some 286,000 irregular migrant arrivals in the EU via different land and sea routes.

According to the UN’s refugee agency UNHCR, Egypt hosts about 480,000 registered refugees and asylum seekers, most of whom fled the civil war in Sudan that broke out in April 2023.

A second EU official briefed on the discussion said the deal was likely to repackage some existing EU support programmes for Egypt, which has long been an important partner for the bloc.

Arrangements with third countries have become a key EU policy tool as it seeks to manage migration despite accusations that outsourcing its border management indirectly supports violations of international law and human rights.

Egypt has a patchy human rights record, and the government of President Abdel Fattah al-Sisi, who took power in a 2013 military coup, has repressed dissent. Last year, 26,500 Egyptians applied for asylum in the EU, up from 15,400 in 2022, according to the EU Asylum Agency.

The European Commission and other politicians have defended the agreements as a viable tool to manage immigration, given an increase in arrivals to the bloc.

“We can talk about the human rights situation in Egypt as much as you want,” Kairidis said. “But I also have this real situation.”