Commissioner Fuele: EU keen to match support to Egypt with necessary funds

The European Union is keen to support the transformation and modernisation of Egypt, and match it with the necessary funds, European Commissioner for Neighbourhood Policy Štefan Füle said in remarks at the end of the EU-Egypt Task Force meeting in Cairo.

His comments came as the EU agreed a major package of economic and political assistance to help Egypt with its ongoing transition, undertaking to provide nearly €5 billion in the form of loans and grants for 2012-2013.

The Task Force was the largest-ever meeting between the European Union and Egypt, co- chaired by EU High Representative Catherine Ashton and Egyptian Foreign Minister Kamel Amr, with more than 500 participants, committed to launching a new EU-Egypt relationship.

Füle said EU support and assistance needed to be targeted and based on the priorities defined by its Egyptian partners.

He went on to outline the EU's financial assistance for Egypt:

  • National Indicative Programme for Egypt amounting to €449 million for years 2011-2013. For this year there are still €130 million in grants. For the next year €157 million is allocated.
  • Additional fresh funding - €90 million from the SPRING program (Support for Partnership, Reform and Inclusive Growth) as a reflection of the reform process. This money will go into supporting the economic recovery programme of the government and is based on the principle of 'more for more'. "We leave it open for the next year how much money could go to Egypt based on its reform performance from the €150 million allocated in SPRING to the Southern Neighbourhood for 2013."
  • €163 million grant from the Neighbourhood Investment Facility and a further €50 million grant of Macro-Financial Assistance – altogether, this adds up to significant additional financial assistance of €303 million in grants and €450 million in loans to support economic recovery programme, development and consolidate political reforms.

"So, altogether for the years 2012-13 we are talking about almost one billion euro, out of which more than €700 million is conditioned by economic criteria, good governance and the principle of 'more for more'."

In addition, the European Investment Bank (EIB) has announced potential lending of up to one billion euros per year, more than doubling the bank's recent activity in Egypt, while the European Bank for Reconstruction and Development (EBRD) confirmed the start of operations in Egypt this month and announced plans to ramp up lending volumes to €1 billion per year.

The Commissioner said it was important to translate the momentum of the Task Force into practical proposals. "It is not only about money. Today we have been speaking about some great ideas that have been on the table since the revolution in Egypt: the possibility of a free trade area, mobility partnership and further strengthening of our cooperation. It is time to deliver on those initiatives for the benefit of the Egyptian people. It is time to turn these ideas into a new Action Plan."

Amongst other outcomes of the Task Force meeting:

  • The EU and Egypt will start a high-level dialogue on agriculture.

  • The EU and Egypt agreed to implement the MoU on energy cooperation.
  • The Task Force agreed to an enhanced bilateral dialogue on economic reform.
  • The EU and Egypt agreed to jointly explore how to deepen trade and investment relations, including via technical assistance, which could lead to a Deep and Comprehensive Free Trade Agreement (DCFTA).
  • Three agreements were signed between the EU and Egypt covering SMEs in rural areas, extension of the Cairo Metro and measures to boost trade.
  • This week the EU adopted new measures to help the recovery of misappropriated assets linked to the previous regime and the Task Force agreed to develop an Asset Recovery Road Map in the next three months to drive progress.
  • The Task Force announced a doubling of the Egyptian participation in Erasmus Mundus and Tempus programmes aimed at bringing Egyptian students and researchers to Europe.
  • The EU and the Egyptian authorities also agreed to an EU-Egypt Cultural Platform.

Source: EU Neighbourhood Info

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    German-Arab Chamber of Industry and Commerce
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    British Egyptian Business Association
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    French Chamber of Commerce in Egypt
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    Delegation of the European Union to Egypt
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    Italian Chamber of Commerce in Egypt