EU Pledges Billions of Euros for Egypt

File photo: Egyptian President Abdel Fattah Al-Sisi meets with European Commission President Ursula von der Leyen at the Ittihadiya presidential palace in Cairo, Egypt. (Reuters/File)
File photo: Egyptian President Abdel Fattah Al-Sisi meets with European Commission President Ursula von der Leyen at the Ittihadiya presidential palace in Cairo, Egypt. (Reuters/File)
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EU Pledges Billions of Euros for Egypt

File photo: Egyptian President Abdel Fattah Al-Sisi meets with European Commission President Ursula von der Leyen at the Ittihadiya presidential palace in Cairo, Egypt. (Reuters/File)
File photo: Egyptian President Abdel Fattah Al-Sisi meets with European Commission President Ursula von der Leyen at the Ittihadiya presidential palace in Cairo, Egypt. (Reuters/File)

The European Union announced a 7.4 billion euro ($8.1 billion) funding package and an upgraded relationship with Egypt on Sunday.

The agreement lifts the EU's relationship with Egypt to a "strategic partnership" and was unveiled as a delegation of leaders visited Cairo. It is designed to boost cooperation in areas including renewable energy, trade and security, while delivering grants, loans and other funding over the next three years to support Egypt's faltering economy.

The proposed funding includes 5 billion euros in concessional loans and 1.8 billion euros of investments, according to a summary published by the EU. Another 600 million euros would be provided in grants, including 200 million euros for managing migration.

Such deals were "the best way to address migratory flows", said Italian Prime Minister Giorgia Meloni, who travelled to Cairo alongside EU Commission President Ursula von der Leyen, the Greek, Austrian and Belgian prime ministers, and the Cypriot president.

Inflation is running close to record highs and many Egyptians say they struggle to get by. Over the past month, however, financial pressure has eased as Egypt struck a record deal for Emirati investment, expanded its program with the IMF, and sharply devalued its currency.

Diplomats say Egypt's strategic importance has been underscored by the war in Gaza, where Egypt is trying to mediate between Israel and Hamas and increase deliveries of humanitarian aid; and by the conflict in neighboring Sudan, which has created the world's biggest displacement crisis.

Speaking alongside Egyptian President Abdel Fattah al-Sisi, von der Leyen said it was critical to rapidly reach a Gaza ceasefire deal. Both leaders warned against an Israeli incursion into Rafah, where much of Gaza's population has been displaced.

Egypt says it has lined up a total of $20 billion in multilateral support after increasing its loan and economic reform program with the IMF.

Most of the EU funding is newly allocated and was drawn up in close cooperation with the IMF, with 1 billion euros of the "macro-financial" loan funding to be delivered this year, a senior EU official said.

The remaining 4 billion euros are subject to approval by the European parliament, the official added.

Egypt largely shut off irregular migration from its north coast in 2016, but more recently there has been a surge in Egyptians trying to cross to Europe via Libya, and the EU is already providing support aimed at reducing those flows.

In recent months, the Greek islands of Crete and Gavdos have seen a steep rise in migrant arrivals, mostly from Egypt, Bangladesh and Pakistan.

"We must prevent the opening of new migration routes and we will work very closely with Egypt to ensure that this will be achieved," said Greek Prime Minister Kyriakos Mitsotakis, adding that both countries would try to open up legal pathways on migration.



IMF Approves Third Review of Sri Lanka's $2.9 Bln Bailout

Peter Breuer, Senior Mission Chief for Sri Lanka at the IMF along with Katsiaryna Svirydzenka, Deputy Mission Chief for Sri Lanka at the IMF and Martha Tesfaye Woldemichael, Deputy Mission Chief for Sri Lanka at the IMF, attend a press conference organized by the International Monetary Fund (IMF) in Colombo, Sri Lanka, November 23, 2024. REUTERS/Thilina Kaluthotage
Peter Breuer, Senior Mission Chief for Sri Lanka at the IMF along with Katsiaryna Svirydzenka, Deputy Mission Chief for Sri Lanka at the IMF and Martha Tesfaye Woldemichael, Deputy Mission Chief for Sri Lanka at the IMF, attend a press conference organized by the International Monetary Fund (IMF) in Colombo, Sri Lanka, November 23, 2024. REUTERS/Thilina Kaluthotage
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IMF Approves Third Review of Sri Lanka's $2.9 Bln Bailout

Peter Breuer, Senior Mission Chief for Sri Lanka at the IMF along with Katsiaryna Svirydzenka, Deputy Mission Chief for Sri Lanka at the IMF and Martha Tesfaye Woldemichael, Deputy Mission Chief for Sri Lanka at the IMF, attend a press conference organized by the International Monetary Fund (IMF) in Colombo, Sri Lanka, November 23, 2024. REUTERS/Thilina Kaluthotage
Peter Breuer, Senior Mission Chief for Sri Lanka at the IMF along with Katsiaryna Svirydzenka, Deputy Mission Chief for Sri Lanka at the IMF and Martha Tesfaye Woldemichael, Deputy Mission Chief for Sri Lanka at the IMF, attend a press conference organized by the International Monetary Fund (IMF) in Colombo, Sri Lanka, November 23, 2024. REUTERS/Thilina Kaluthotage

The International Monetary Fund (IMF) approved the third review of Sri Lanka's $2.9 billion bailout on Saturday but warned that the economy remains vulnerable.
In a statement, the global lender said it would release about $333 million, bringing total funding to around $1.3 billion, to the crisis-hit South Asian nation. It said signs of an economic recovery were emerging, Reuters reported.
In a note of caution, it said "the critical next steps are to complete the commercial debt restructuring, finalize bilateral agreements with official creditors along the lines of the accord with the Official Creditor Committee and implement the terms of the other agreements. This will help restore Sri Lanka's debt sustainability."
Cash-strapped Sri Lanka plunged into its worst financial crisis in more than seven decades in 2022 with a severe dollar shortage sending inflation soaring to 70%, its currency to record lows and its economy contracting by 7.3% during the worst of the fallout and by 2.3% last year.
"Maintaining macroeconomic stability and restoring debt sustainability are key to securing Sri Lanka's prosperity and require persevering with responsible fiscal policy," the IMF said.
The IMF bailout secured in March last year helped stabilize economic conditions. The rupee has risen 11.3% in recent months and inflation disappeared, with prices falling 0.8% last month.
The island nation's economy is expected to grow 4.4% this year, the first increase in three years, according to the World Bank.
However, Sri Lanka still needs to complete a $12.5 billion debt restructuring with bondholders, which President Anura Kumara Dissanayake aims to finalize in December.
Sri Lanka will enter into individual agreements with bilateral creditors including Japan, China and India needed to complete a $10 billion debt restructuring, Dissanayake said.
He won the presidency in September, and his leftist coalition won a record 159 seats in the 225-member parliament in a general election last week.