RIYADH: Egypt and the EU have signed a €4 billion ($4.63 billion) agreement to launch the second phase of the Macro-Financial Assistance and Budget Support Mechanism, aimed at strengthening the country’s macroeconomic resilience.
The agreement was signed during the Egyptian-European Summit in Brussels and witnessed by President Abdel Fattah El-Sisi, European Commission President Ursula von der Leyen, and European Council President Antonio Costa.
On the Egyptian side, the MoU was signed by Minister of Planning, Economic Development, and International Cooperation Rania Al-Mashat, alongside Valdis Dombrovskis, European Commissioner for Economy and Productivity.
Al-Mashat said the MFA is part of a broader partnership between Egypt and the EU, focusing on trade and investment ties to support fiscal stability and economic growth.
The agreement comes as Egypt recorded a historic high of $8.5 billion in dollar resources in July, reflecting improved economic indicators, including rising remittances from abroad.
Fitch Ratings affirmed Egypt’s long-term foreign-currency issuer default rating at “B” with a stable outlook in April, citing the country’s large economy, potential gross domestic product growth, and support from bilateral and multilateral partners.
In an official post on the Egyptian Prime Minister’s Facebook page, the statement said: “She (Al-Mashat) noted that the second phase, worth €4 billion, came after ongoing coordination between various national authorities and the European Commission throughout the year to review the proposed structural reform matrix, which includes 87 reforms within the National Structural Reform Program.”
It added: “She emphasized that these reforms aim to enhance macroeconomic stability and resilience, improve competitiveness and the business environment, and promote green transformation, including protecting the Red Sea ecosystem.”
Al-Mashat added that the partnership supports Egypt’s ongoing economic reform efforts and enhance economic resilience in the face of external fluctuations. She also highlighted that financing helps the government extend debt maturities, enhance sustainability, and bridge funding gaps.
The partnership underscores Egypt’s commitment to economic diversification and strategic international collaboration, as the government continues implementing reforms to stabilize public finances and attract investment.
The North African country’s economy has shown resilience despite global headwinds, with foreign investment and policy reforms helping offset volatile markets, Standard Chartered said in its August outlook.
