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.



Washington Urges Israel to Extend Cooperation with Palestinian Banks

A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)
A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)
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Washington Urges Israel to Extend Cooperation with Palestinian Banks

A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)
A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)

The United States on Thursday called on Israel to extend its cooperation with Palestinian banks for another year, to avoid blocking vital transactions in the occupied West Bank.

"I am glad that Israel has allowed its banks to continue cooperating with Palestinian banks, but I remain convinced that a one-year extension of the waiver to facilitate this cooperation is needed," US Treasury Secretary Janet Yellen said Thursday, on the sidelines of a meeting of G20 finance ministers in Rio de Janeiro.

In May, Israeli Finance Minister Bezalel Smotrich threatened to cut off a vital banking channel between Israel and the West Bank in response to three European countries recognizing the State of Palestine.

On June 30, however, Smotrich extended a waiver that allows cooperation between Israel's banking system and Palestinian banks in the occupied West Bank for four months, according to Israeli media, according to AFP.

The Times of Israel newspaper reported that the decision on the waiver was made at a cabinet meeting in a "move that saw Israel legalize several West Bank settlement outposts."

The waiver was due to expire at the end of June, and the extension permitted Israeli banks to process payments for salaries and services to the Palestinian Authority in shekels, averting a blow to a Palestinian economy already devastated by the war in Gaza.

The Israeli threat raised serious concerns in the United States, which said at the time it feared "a humanitarian crisis" if banking ties were cut.

According to Washington, these banking channels are key to nearly $8 billion of imports from Israel to the West Bank, including electricity, water, fuel and food.