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EU €5bn aid to Egypt stands yet stymied by limited economic reform

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Moran said he considers economic growth and Egypt’s inability to attract new investment among one of the largest challenges facing the country’s new government.

The European Union (EU) will be cancelling a series of grants and loans, totalling upwards of €5bn, previously scheduled to be provided to Egypt from the European Investment Bank and the European Bank for Reconstruction and Development, according to James Moran, EU ambassador to Egypt. ( AFP Photo)

The European Union (EU) says €5bn pledged to Egypt as loans and grants are still available but stalled by limited unclear economic vision, according to James Moran, EU ambassador to Egypt.
( AFP Photo)

The European Union’s (EU) pledged grants and loans to Egypt worth €5bn have been prolonged as a result of the Egyptian government’s lack of a clear economic vision, James Moran, EU ambassador to Egypt said.

The aid package, which is to be given to Egypt by the European Investment Bank and the European Bank for Reconstruction and Development, “remains available but we have not been able to move as fast as we would like because of the lack of a framework for economic reform,” Moran said in a recent presser.

On 20 June, the Daily News Egypt had translated a news story from AlBorsa Daily which incorrectly quoted Moran as saying that the EU withdrew the €5bn in grants and loans.

Moran said the EU decided to make its aid to Egypt contingent upon the latter’s obtainment of the International Monetary Fund (IMF) loan, saying that if it were able to obtain the loan that this would help increase the confidence of foreign investors, regardless of the conditions placed on Egypt by the IMF. He added that investors from the EU own roughly a third of all foreign investment within Egypt.

Moran said he considers slow economic growth and Egypt’s inability to attract new investment among one of the largest challenges facing the country’s new government. He stated that Egypt’s new government should work to develop new free trade agreements with neighbouring nations, saying that it would be difficult to predict the country’s future growth rates before the end of the current fiscal year.

Moran remained optimistic, however, regarding the potential for Egypt’s economy to recover over the coming months, saying that the EU at the moment had no choice but to wait and see how the future would play out within the country.

He further emphasised the need for Egypt’s security situation to stabilise before the country would be able to attract new foreign investment, saying that he had received reassurances from officials representing Defence Minister Abdul Fatah Al-Sisi, stating that Al-Sisi had learned from Egypt’s past experiences, and sought to move the country back to democracy as fast as possible.He stated it would be impossible for the EU to intervene to promote reconciliation between Egypt’s various political factions if those within the country themselves were not ready to do so.

He added that the EU was further concerned with events in Sinai and the increasing lack of security within the peninsula.Catherine Ashton, High Representative of the Union for Foreign Affairs and Security Policy for the EU, attributed the lack of security within Egypt to demands that former president Mohamed Morsi be released, adding that the EU rejected the arrest of any additional individuals who are held without concrete evidence.She further spoke with representatives from Egypt’s government regarding sexual harassment taking place against women during protests and demonstrations, in addition to the government shutting down of a number of independent television networks, along with claims being made that several journalists were subject to imprisonment. She emphasised the EU’s opposition to attempts that may be made to change Egypt’s civil societies’ law.

 

  • sam enslow

    With ever growing problems in Greece, Italy, Portugal, Spain, Cyprus, all the EU needed was an excuse. The US is also facing financial problems and budget cuts. The tax payers, who are often generous to other countries and whose private citizens support many NGO’s, have others in need of the same resources. They will be very happy to allow Arab countries to help each other. In fact, that is as it should be. Arabs are happier with such an arrangement as are the Western powers. I would believe that China and Russia may be willing to help also.

  • DAMNtoMilitaryrule

    THAT IS BRAVE DECISION FROM EU BUT UNFORTUNATELY THAT DECISION WILL HIT ONLY THE POOREST IN EGYPT WHEN MUBARAK RULER NOW WILL USE IT TO REPRESS AGAIN HUMAN RIGHT AND DAMAGE WHAT LEFT OF EGYPT DEMOCRACY.BECAUSE SOON OR LATER EGYPTIANS WILL BE ONLY CONCERN ABOUT THEIR STOMACH THAN FREE SPEECH OR HUMAN RIGHT.

    • Kelley Christian

      What if you are wrong? What if the interim government is dedicated to creating a land of equality for all. Free speech, the right to practice the religion of your choice. Civil law that applies to every man and woman regardless of religion. What if they can create a country where every person can read and write so that they can understand what their government is about. Those people then can go on to create new industries, invent things, every human can develop their potential that God gave them. You speak of human rights, is it right for woman and children to be in the front lines of a protest to be human shields for men? Not much of a man if he does that.
      You are upset because you are MB, we understand that, you lost control of the country that you dreamed of turning into a place where only your view of the world would be tolerated. The is not a democracy that is a dictatorship, Hitler tried the same thing.

      • DAMNtoMilitaryrule

        What so right in your comment is because you are predicting and nothing sure in all of your comment.The beginning is a light of the future. What is going now in Egypt you towards to the jungle.Massive human right violation, arbitrary detention, TV channels shut-down and so on……. indicate that what you are assuming (equality,free speech,civil law) won’t happen in the near future.
        I am standing by what I wrote above. If you are not emotional person let me give you some examples:
        After SANKARA depose in BURKINA-FASSO till now no democracy. In a small country call TOGO , opposition democratic militants have been turn around since 1990 by Togolese army back by old regime of EYADEMA democracy become an illusion. PINOCHET you know that maybe……….
        If you are a defiant give me a single army coup d’etat whatever you call it in Egypt, in any country has brought a democracy to the country. The answer is none. Thank you

  • Pingback: EU withdraws previously agreed €5bn grant – Daily News Egypt - Members of the European Union

  • Najlaa AbdElBary

    Please note that Ambassador James Moran, Head of the European Union Delegation to Egypt, has been misquoted in this story.

  • Pingback: Commentary: Post-Arab uprisings message – prioritize economic growth – J. AbiNader | Morocco On The Move

  • Pingback: Post-Arab uprisings message – prioritize economic growth | IdeaCom, Inc.

  • Najlaa AbdElBary

    One further correction:

    EU investment accounts for roughly 3/4 of total foreign direct investment in Egypt (75%), not one third.

  • Najlaa AbdElBary

    EU investment accounts for roughly 3/4 of total foreign direct investment in Egypt (75%), not one third


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