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European companies have signed contracts with Egyptian partners totalling more than 40 billion euros ($42.85 billion), the European Commission president told an investment conference in Cairo on Saturday, as part of efforts to shore up Egypt’s fragile economy.
The announcement of more than 20 new agreements and memoranda of understanding by European Commission President Ursula von der Leyen follows a 7.4 billion euro funding package and strengthened ties announced in March as Egypt tries to contain the spread of conflict in Gaza and Sudan and European countries try to stem the flow of migrants across the Mediterranean.
A strong and stable Egypt
European officials want to help Egypt shore up its resilience by boosting investment and the private sector after successive shocks, including the war in Ukraine and the fallout from the coronavirus pandemic, exposed underlying economic weaknesses.
“Egypt’s stability and prosperity are essential for the entire region,” von der Leyen said in her opening address at the two-day Egypt-EU Investment Conference.
At the conference, European companies and their Egyptian partners are expected to sign contracts worth over 40 billion euros.
That is the power of our partnership.
Build a framework of trust and certainty.
This is exactly the message the business world needs to hear. https://t.co/41jSzhWL2R
— Ursula von der Leyen (@vonderleyen) June 29, 2024
Sisi said the meeting came at a “crucial time” when coordination between Europe and Egypt was needed, given a series of international and regional crises.
Speakers at the event focused on Egypt’s strategic location between Europe, the Middle East and Africa, and its potential to export clean energy and provide cheap, skilled labor to European companies looking to “nearshore” their home markets.
European Commission energy director Ditte Juhl Jorgensen said about half of the deals signed were in the energy sector.
Von der Leyen said European companies looking to invest also span sectors such as water management, construction, chemicals, shipping and aviation.
Egypt strengthened by foreign investment
Egypt has received significant foreign funding and commitments this year from the UAE, the International Monetary Fund, the World Bank and the EU.
This helped ease a long-running foreign currency crisis and prompted reform efforts that included more flexible exchange rates, restrictions on off-budget spending, and a reduction in the powerful role of the state and the military in the economy.
So far, these pledges have done little to stimulate the private sector.
Read: World Bank announces $700 million loan for Egypt
assignment
Egypt has been hit by regular power outages as summer sets in, and fertilizer and chemical plants have halted production due to gas shortages, a sign of the continuing challenges.
Businessmen and diplomats say there is little transparency about how economic strategy is decided.
Nearly four weeks have passed since the resignation of the current cabinet was announced, but a new government has yet to be appointed.
Egyptian authorities say they are doing their best to deal with outside pressures and cater for a population that is growing to 106 million people.
Von der Leyen was in Cairo to seek the European Parliament’s approval for a second five-year term as European Commission president.
European Union leaders agreed on Thursday to nominate a German candidate, but a secret parliamentary vote is widely seen as a more difficult proposition.
Egypt secures 7.4 billion euro aid package from EU
