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EU-Egypt relations: Investing in socio-economic development and inclusive growth

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The EU and Egypt undertook closer cooperation in many areas, notably on socio-economic development, scientific research, energy, migration, countering terrorism and regional issues.

The report on the partnership between the EU and Egypt for the period from June 2017 to May 2018 was issued today and highlights key developments in EU-Egypt cooperation with a particular focus on achieving the objectives set under the Partnership Priorities 2017-2020, adopted during the EU-Egypt Association Council in July 2017.

High Representative/Vice-President Federica Mogherini said: “Egypt, its stability and development are key to the European Union, its Member States and the entire region. That is why we signed our partnership priorities last year and reinforced our already strong engagement with and for the Egyptian people. We are determined to continue our work, together, to address all the challenges we have to face, for the sake of our citizens.”

Commissioner for European Neighbourhood Policy and Enlargement Negotiations Johannes Hahn added: “In the last year we stepped up our action to support Egypt reforming its economy, working for a sustainable and inclusive growth. For the EU it is imperative that the young generation, women and the most vulnerable members of the society are included in this process. The EU will continue to support Egypt tackling socio-economic challenges and will keep working together for the stability and prosperity of the region.”

During the reporting period, the EU’s commitment vis-à-vis Egypt was reaffirmed through regular political dialogues, bilateral visits by the EU and Egyptian sides and continued implementation of the EU’s financial assistance.

Egypt also continued to engage as regional player on key regional and international issues, notably in the perspective of its African Union presidency next year, such as the Middle East Peace Process, Syria, Libya, Africa, the situation in Gulf and the Euro-Mediterranean cooperation.

Overall, the conclusions of the report show that the implementation of priority areas is well on track, with notable challenges remaining in particular in the field of the rule of law, human rights, fundamental freedoms and space for civil society. The next EU-Egypt Association Council that will be held in Brussels on 20 December will be the occasion to further discuss the EU-Egypt partnership for the months ahead.

More details

The overall EU financial assistance commitments to Egypt amount to over €1,3 billion in grants. This amount mainly targets social development and jobs creation, infrastructure, renewable energy, water and sanitation/waste management, environment, but it also supports the improvement of governance, human rights, justice and public administration reform in Egypt.

Through the multiannual programme Facility for Inclusive Growth and Job Creation the EU supports the business enabling environment and promote economic reforms in favour of enterprises, including easier access to finance for small and medium-sized enterprises. The EU is also promoting labour- intensive community services and public works as an effective and well-targeted social safety net. Via the EU programme Emergency Employment Investment Project (EEIP) completed in January 2018, more than 50,000 young people, many of them women, have acquired new skills and been given access to jobs. Nearly 10,000 of them have received specific support to get permanent jobs or start their own business.

A number of high-level visits and meetings contributed to enhance the partnership between the EU and Egypt in 2017-2018 and to discuss regional and international issues of concern. Those include meetings between Egyptian President Abdelfattah Al-Sisi and the President of the European Council Donald Tusk in September 2017; High Representative/Vice-President Federica Mogherini’s meetings with the Egyptian Foreign Minister Shoukry in the margins of various international forums; the visit of Commissioner for the European Neighbourhood Policy and Enlargement Negotiations, Johannes Hahn, in October 2017, to reaffirm EU’s support to Egypt’s migration management inside and outside its borders with the signature of a €60 million programme under the EU Emergency Trust Fund for Africa; the visit of Commissioner for Climate Action and Energy, Miguel Arias Cañete, in April 2018 during which he signed a new Memorandum of Understanding on energy cooperation; and the launch by Commissioner for Migration, Home Affairs and Citizenship, Dimitris Avramopoulos, in December 2017 of the EU-Egypt Migration Dialogue, aimed at improving bilateral cooperation and discussions on the overall topic of migration.

A further step in EU-Egypt cooperation includes the signing of an agreement on scientific and technological cooperation for Egypt’s participation in the Partnership for Research and Innovation in the Mediterranean Area (PRIMA) in October 2017.

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Africa-Europe Alliance: Two new financial guarantees under the EU External Investment Plan

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Today in the margins of the 2019 Africa Investment Forum in Johannesburg, South Africa, the European Commission signed two guarantee agreements with two Member States’ development finance institution: the Dutch ‘Financierings-Maatschappij voor Ontwikkelingslanden N.V’ (FMO) and the Italian ‘Cassa Depositi e Prestiti’ (CDP). These guarantee agreements are part of the implementation of the EU External Investment Plan, the financial arm of the Africa-Europe Alliance for Sustainable Investment and Jobs.

Commissioner for International Cooperation and Development, Neven Mimica said: “The agreements signed today, worth €70 million, will help us to unlock more than €500 million in new investment in Africa and the EU Neighbourhood. These guarantees aim at mitigating and sharing the risk with other private investors in countries where otherwise these investments would not be as attractive. They will help to boost access to finance for small businesses, notably in the tech sector – and create up to 175,000 jobs directly and indirectly.”

Two guarantees, one goal: more investment in partner countries

The two guarantees will significantly boost investment and access to finance for small businesses (MSMEs), especially in the technology sector, in the countries covered by the Plan.

FMO Ventures Programme
This €40 million guarantee agreement is a partnership with FMO, the Dutch development bank. It targets Sub-Saharan Africa and the EU Neighbourhood. It will guarantee venture capital provided by FMO to start-up companies, in particular led by young entrepreneurs. The companies will use technology to lower the costs of making or supplying products and services that were previously unaffordable to many people. The guarantee will target companies offering digital solutions in a wide range of areas, from agriculture, access to energy and financial services to education, healthcare, transport and logistics. It will support up to 125,000 new jobs, directly and indirectly.

Archipelagos One4A – One Platform for Africa
The €30 million Archipelagos guarantee agreement is a partnership with Cassa Depositi e Prestiti (CDP), the Italian Development Bank, and the African Development Bank (AfDB). It will support access to finance across Africa for high potential small businesses. In order to help their growth, the programme supported by the guarantee will provide financing through innovative capital markets solutions. It will also enable financing partners to share the risk of investing in projects. By doing so it will generate up to 50,000 jobs, many for young people, and benefit about 1,500 small businesses in 10 African countries.

These guarantees are part of the External Investment Plan, which, by investing €4.5 billion, is set to leverage €44 billion in total investment. Out of the total budget, the EU has already allocated €4.2 billion.

Background

The EU External Investment Plan is using €4.5 billion in public funds to leverage €44 billion by 2020 in public and private investment for development in countries neighbouring the EU and in Africa.

The plan has three pillars. The first is finance. Through financial guarantees, the EU mitigates the risk in countries with difficult environments so that private investors and development banks will lend to entrepreneurs or finance development projects.

The plan’s second part is technical assistance. This funds experts who help develop new projects, to the benefit of will authorities, investors and companies. Technical assistance may include, for example, market intelligence and investment climate analysis, targeted legislative and regulatory advice, support to partner countries in implementing reforms, chains and identification, preparation, and help to carry out necessary investments.

The third part is investment climate support. The EU works closely with governments in partner countries to help them improve the conditions which investors consider when making their decisions. These include the business environment and a country’s political and economic stability. The EU also brings together governments and business to discuss investment challenges.

The External Investment Plan is a key part of the Africa-Europe Alliance for Sustainable Investment and Jobs, launched by European Commission President Jean-Claude Juncker in September 2018. The Alliance aims to boost investment which creates jobs and promotes sustainable development.

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EU delivers on stronger European Border and Coast Guard to support Member States

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Today, the Council has officially adopted the Commission’s proposal to reinforce the European Border and Coast Guard. The European Border and Coast Guard Agency will have a standing corps of 10,000 border guards, a stronger mandate on returns and will also be able to cooperate more closely with non-EU countries, including those beyond the EU’s immediate neighbourhood. This will give the Agency the right level of ambition to respond to the challenges facing Europe in managing migration and its external borders.

Welcoming today’s final adoption, First Vice-President Frans Timmermans and Commissioner for Home Affairs, Migration and Citizenship Dimitris Avramopoulos said:

“Today the European Union has achieved an ambitious task of transforming the EU border agency, Frontex, into a fully-fledged European Border and Coast Guard. This Agency will be equipped to offer tangible support to Member States to manage the EU’s external border – wherever and whenever needed.

From less than 300 border guards on the ground in 2014, the European Border and Coast Guard is now deploying around 1,300 officers and will soon have a 10,000-strong standing corps available for deployment. This is a collective achievement, which would not have been possible without strong political support for a common approach.

The European Border and Coast Guard is now stronger than ever. While Member States will remain responsible for the management of external borders, the standing corps will provide unprecedented operational support on the ground. Its officers will be able to assist national border guards in conducting identity and document checks, with border surveillance and return operations.

The Agency will also provide support beyond the EU’s borders. With European Border and Coast Guard officers already deployed in Albania and soon in other Western Balkan countries also, the Agency will be able to cooperate with third countries beyond the EU’s immediate neighbourhood.

We have spared no effort to make sure that Member States have the necessary tools to protect their borders and ensure the security of European citizens.

But our work is not yet done. The Commission will now provide its full support to help the Agency quickly take up its new tasks and ensure the standing corps swiftly reaches its full capacity of 10,000 border guards.”

Next steps

The European Parliament and the Council will now jointly sign the final text. The text will then be published in the Official Journal of the European Union and the European Border and Coast Guard’s reinforced mandate will enter into force 20 days later. The new European Border and Coast Guard standing corps will be ready for deployment from 2021, and will then gradually reach its full capacity of 10,000 border guards.

Background

The European Border and Coast Guard consists of Member States’ authorities responsible for border management and return, and of the European Border and Coast Guard Agency. It was established in 2016, building on the existing structures of Frontex, to meet the new challenges and political realities faced by the EU, both as regards migration and internal security. The reliance on voluntary contributions of staff and equipment by Member States has however resulted in persistent gaps affecting the efficiency of the support the European Border and Coast Guard Agency could offer.

In his 2018 State of the Union Address President Juncker announced that the Commission will reinforce the European Border and Coast Guard even further. The objective of this upgrade was to equip the Agency with a standing corps of 10,000 border guards and to provide the agency with its own equipment to allow it to respond to challenges as they arise. The European Parliament and the Council reached a political agreement on the Commission’s proposal on 28 March 2019. With the last step completed in the Council today, both institutions have now formally adopted the text.

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EU-Singapore agreement to enter into force on 21 November 2019

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EU Member States today endorsed the trade agreement between the EU and Singapore. This means the agreement will enter into force as soon as 21 November.

President of the European Commission Jean-Claude Juncker said: “This is the European Union’s first bilateral trade agreement with a Southeast Asian country, a building block towards a closer relationship between Europe and one of the most dynamic regions in the world. It crowns the efforts of this Commission to build a network of partners committed to open, fair and rules based trade. Trade has created 5 million new jobs in the EU since I took office in 2014, and now contributes to the employment of 36 million people. This, together with the fact that it accounts for 35% of the EU GDP, shows how critical trade is for Europe’s prosperity.”

Commissioner for Trade Cecilia Malmström said: “Our trade agreement with Singapore provides further evidence of our commitment to fair and rules-based trade. The agreement will benefit workers, farmers and companies of all sizes, both here and in Singapore. It also includes strong clauses protecting human and labour rights and the environment. This agreement means that in the last five years we have put in place 16 EU trade deals. This brings the total to 42 trade agreements with 73 partners, accounting for a third of total EU trade. This is the largest such network in the world.”

Singapore is by far the EU’s largest trading partner in the Southeast Asian region, with a total bilateral trade in goods of over €53 billion and another €51 billion of trade in services. Over 10,000 EU companies are established in Singapore and use it as a hub for the whole Pacific region. Singapore is also the number one location for European investment in Asia, with investment between the EU and Singapore growing rapidly in recent years: combined bilateral investment stocks reached €344 billion in 2017.

Under the trade agreement, Singapore will remove all remaining tariffs on EU products. The agreement also provides new opportunities for EU services’ providers, among others in sectors such as telecommunications, environmental services, engineering, computing and maritime transport. It will also make the business environment more predictable. The agreement will also enable legal protection for 138* iconic European food and drink products, known as Geographical Indications. Singapore is already the third largest destination for such European specialty products. Singapore also agreed to remove obstacles to trade besides tariffs in key sectors, for instance by recognising the EU’s safety tests for cars and many electronic appliances or by accepting labels that EU companies use for textiles.

The EU and Singapore have also concluded an investment protection agreement, which can enter into force after it has been ratified by all EU Member States according to their own national procedures.

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