Egypt has received its initial installment of a EUR1 billion ($1.03 billion) financial package from the European Union (EU), as confirmed by Prime Minister Mostafa Madbouly, with the funds deposited into the Central Bank of Egypt (CBE) on Friday.
Conditions for loan disbursement
The European Commission had previously announced in December its decision to release the EUR1 billion in loans to Egypt, contingent upon the fulfillment of policy conditions agreed upon with the EU as part of the ongoing Macro-Financial Assistance (MFA) program.
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Objectives of financial support
The purpose of this financial support is to help Egypt meet a portion of its financing requirements for the fiscal year 2024/25, while also ensuring macroeconomic stability. Additionally, it is designed to reinforce Egypt’s reform agenda in conjunction with the current International Monetary Fund (IMF) program.
During a press conference following Wednesday’s weekly cabinet meeting, Madbouly recognized that the past year posed significant challenges due to various internal and external complexities. He emphasized that the government successfully navigated these obstacles through the implementation of prudent policies and proactive measures.
Future financial projections
Madbouly highlighted that the government had repaid approximately $39 billion last year, fulfilling all of its obligations despite facing considerable global economic hurdles.
He remarked that forecasts for 2025 suggest a considerably lighter financial burden compared to earlier years and stated that the government has formulated a comprehensive strategy to manage all financial commitments.
Government’s confidence in stability
Moreovr, Madbouly assured the public of the state’s capacity to manage financial obligations and overcome challenges. He expressed confidence that the external pressures affecting Egypt and other countries would remain manageable and shared optimism that 2025 would bring greater prosperity for both Egypt and the world.
Ongoing discussions for additional funding
Rania Al-Mashat, Egypt’s minister of Planning, Economic Development and International Cooperation, indicated that discussions are currently in progress to approve a second tranche of EUR4 billion ($4.14 billion).
In December, the EU Commission noted that this MFA, along with the potential second tranche of EUR4 billion under consideration, is a crucial component of the EU-Egypt Strategic and Comprehensive Partnership.
This financial assistance is a response to numerous economic challenges faced in recent years, which have been intensified by the complicated geopolitical landscape in the Middle East. The EU views Egypt as a vital pillar of stability and a strategic partner in the region.
