LOC15:31
12:31 GMT
BRUSSELS, April 12 (KUNA) -- The European council announced on Friday that they will provide EUR one billion of urgent short-term macro-financial assistance to Egypt to help stabilize its economy.
This came in a press release saying that the aid is meant for the deteriorating macro-fiscal situation and financing needs of the country over the recent months, notably after the outbreak of the Gaza war, the Houthi attacks in the Red Sea and the repercussions of Russia's war against Ukraine.
This short-term assistance is part of a package of two proposals to provide macro-financial assistance to Egypt. The second part of the operation, still to be adopted, would provide EUR four billion over the period between 2024-27, it said.
The overall macro-financial assistance accompanies a revamped support program concluded with the International Monetary Fund (IMF), up to EUR eight billion, which will be provided if several conditions are met, it continued.
It will be provided in the form of loans made in one installment, as a precondition for granting the assistance is that Egypt continues to make concrete and credible steps towards respecting effective democratic mechanisms (including a multi-party parliamentary system) and the rule of law, in addition to guaranteeing respect for human rights, it noted.
The decision will enter into force on the day following that of its publication in the Official Journal of the EU, it added.
On March 15, 2024, the Commission proposed a macro-financial assistance operation to Egypt for an overall amount of EUR five billion in loans, following the request of Egypt on March 12 2024.
The proposed macro-financial assistance would provide EUR one billion in the short-term and EUR four billion over the period 2024-2027. The differentiated approach aims to make it possible to disburse the first part of the aid before the end of 2024, to respond to Egypt's urgent financing needs.
In accordance with the Financial Regulation, the loans would be provisioned in the EU budget at a rate of nine percent (about EUR 90 million) under the Neighborhood, Development and International Cooperation Instrument Global Europe (NDICI - Global Europe). (end)
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