European companies are signing deals potentially worth over 40 billion euros ($42.85 billion) with Egyptian partners, EU Commission President Ursula von der Leyen announced at an investment conference in Cairo on Saturday. This initiative aims to bolster Egypt’s fragile economy.
The announcement of more than 20 new deals or MOUs follows a 7.4 billion euro EU funding package and an enhanced relationship established in March. This comes as Egypt grapples with the impacts of conflicts in Gaza and Sudan, while European states seek to stem migrant flows across the Mediterranean.
Human rights groups have criticized the financing for Egypt, citing President Abdel Fattah al-Sisi’s decade-long crackdown on political dissent.
European officials aim to strengthen Egypt’s resilience by boosting investment and the private sector, addressing economic vulnerabilities exposed by the war in Ukraine and the COVID-19 pandemic.
“Your stability and your prosperity are essential for an entire region,” von der Leyen stated at the start of the two-day Egypt-EU investment conference.
President Sisi emphasized the conference’s timing amid successive international and regional crises, highlighting the need for coordination between Europe and Egypt.
Speakers highlighted Egypt’s strategic location between Europe, the Middle East, and Africa, its potential for exporting clean energy, and its capacity to provide skilled labor for European companies looking to “nearshore” operations closer to home markets.
Ditte Juul Joergensen, director general of the European Commission’s energy department, noted that about half of the deals are in the energy sector. Other sectors include water management, construction, chemicals, shipping, and aviation.
This year, Egypt has received significant foreign financing and pledges from the United Arab Emirates, the International Monetary Fund, the World Bank, and the EU.
These funds have eased a long-running foreign currency crisis and prompted commitments to reforms such as a more flexible exchange rate, control of off-budget spending, and reducing the powerful role of the state and military in the economy.
Despite these pledges, the private sector remains sluggish. Egypt is facing routine power cuts, and fertilizer and chemical plants have halted production due to gas shortages. Businesspeople and diplomats express concerns about the lack of transparency in economic strategy decisions. Additionally, a new government has yet to be appointed nearly four weeks after the resignation of the current cabinet.
Egyptian officials assert they are managing external pressures and providing for a growing population of 106 million.
Von der Leyen’s visit to Cairo comes as she seeks approval from the European Parliament for a second five-year term as Commission president. While European Union leaders have agreed to nominate her, the secret ballot vote in the parliament is expected to be challenging.