In its plenary session held today, the House of Representatives approved Presidential Resolution No. 400 of 2024 regarding a memorandum of understanding for the macroeconomic and budget support mechanism between Egypt and the European Union worth one billion euros, which comes in light of upgrading relations between the two sides to the level of a strategic partnership and the financial package that was concluded. It was announced during a meeting between President Abdel Fattah El-Sisi, President of the Republic, and Ursulain von der Leyen, President of the European Commission, in Cairo last March.
The plenary meeting was attended by Dr. Rania Al-Mashat, Minister of Planning, Economic Development and International Cooperation.
For her part, Dr. Rania Al-Mashat confirmed, in her statements, that the relationship between the Arab Republic of Egypt and the European Union is characterized by its diversity and strength over decades of joint and constructive cooperation in order to advance development efforts and achieve the Egyptian state’s priorities in many sectors, explaining that the Egyptian-European Summit Which was held last March, between President Abdel Fattah El-Sisi and the President of the European Commission, and in the presence of a number of heads of government of European countries, was a confirmation of the strength of this partnership and the European side’s keenness to support the Egyptian economy, especially in light of the challenges. Surrounding regional.
*Egyptian-European Summit*
Al-Mashat explained that the Egyptian-European summit is a turning point in the relationship between the two sides, as it witnessed the announcement of upgrading the level of relations to a strategic partnership. According to this announcement, a financial package worth 7.4 billion euros was agreed upon to enhance European investments in Egypt and support the Egyptian economy. Expanding cooperation within the framework of national priorities; Promoting economic stability to ensure a stable and attractive economic environment for investment, encouraging investment and trade in a way that contributes to strengthening bilateral economic relations, developing migration and mobility frameworks to ensure the exchange of expertise and human resources in an organized and mutually beneficial manner, and expanding efforts to develop human capital.
She indicated that the Ministry, in light of its assigned role to strengthen economic relations with the European Union, is working continuously with all partners in order to implement what was agreed upon within the framework of the financial package, both at the level of activating the investment guarantee mechanism to increase European investments in Egypt, as well as implementing a support mechanism. Macroeconomic and budgetary support, as well as technical support grants and capacity building.
*Structural reforms that stimulate the private sector*
The Minister of Planning, Economic Development and International Cooperation added that the macroeconomic and budget support mechanism represents a major axis of cooperation with the European Union, in light of the state’s directions to implement structural reforms that stimulate the private sector and confront the challenges facing the Egyptian economy, as the mechanism provides long-term soft financing. term to support the budget and enhance the state’s ability to move forward with reforms.
She indicated that the Ministry has been holding intensive meetings with various relevant parties and hosting repeated European Union missions to review the matrix of structural reforms that have been implemented within the framework of the National Structural Reforms Programme, which aims to achieve macroeconomic stability and resilience, improve competitiveness and the business environment, and stimulate… Green transformation.
She explained that over the course of 6 months, and in coordination with the relevant authorities (the Central Bank, the Ministries of Finance, Social Solidarity, Labor, Investment and Foreign Trade, Electricity and Renewable Energy, as well as the Competition Protection and Antitrust Agency, and the Information and Decision Support Center of the Council of Ministers), the government implemented many Among the reforms within the framework of the three pillars of the structural reforms program, including calculating the payroll tax electronically, activating the unified public finance law to set an annual ceiling for general government debt, and promoting sustainable transformation through the expansion of social protection networks, as a decision was issued. The Presidency of the Council of Ministers to all government agencies by sending all tax exemptions granted to state-owned companies to prepare a preliminary draft of the exemptions that should be cancelled, as well as creating a unified database managed by the State-owned Companies Inventory and Follow-up Unit that includes ownership details for all state-owned companies.
The reforms also included preparing a plan for the public electronic procurement system in line with the current public procurement law. At the level of green transformation, the government adopted the revised sustainable energy strategy by September 2024, and regulations for issuing energy certificates of origin were also issued to support the framework for private sector companies.
Dr. Rania Al-Mashat confirmed that the structural reforms that have been implemented stem from a clear direction and vision for the state, to enhance the competitiveness of the economy, increase the participation of the private sector, adopt policies and programs that attract investments, and simplify the legislative and regulatory frameworks, in a way that prepares the business climate to become more attractive to local and foreign investments. Pointing out that these reforms are integrated with other measures related to the governance of investment spending and regulating the state’s participation in economic activities, which ultimately leads to economic growth and development led by the private sector.
Al-Mashat pointed to the vital role of development partners in promoting these reforms, by providing budget support financing, whether through the European Union, the World Bank Group, the African Development Bank, and other partners.
*Egyptian European Investment Conference*
Dr. Rania Al-Mashat had signed, during the Egyptian-European Investment Conference, which was held last June, with Mr. Valdis Dombrovskis, Executive Vice President of the European Commission, the first phase of the Macroeconomic and Budget Support Mechanism (MFA), worth one billion euros, which is the first phase. Of financing worth 5 billion euros, it will be available until 2027.
The Minister of Planning, Economic Development and International Cooperation confirmed that the macroeconomic support and budget support mechanism is part of a broader partnership with the European Union at the trade, investment and economic levels, within which the government works to attract European investments in the fields of renewable energy, green hydrogen, and supporting food security.
She referred to the report issued by the Ministry at the beginning of this year to review the partnership with the Europe team, led by European financing institutions such as the European Investment Bank and the European Bank for Reconstruction and Development, noting that the government is moving forward in its partnership with various European parties to expand development efforts and strengthen the partnership within the framework of Climate action, especially through implementing the “Novi” programme.
