EU/Egypt Programmes

Traditionally, Egypt has been the major beneficiary of EU financial co-operation dedicated to the Mediterranean Partners. The framework of co-operation with Egypt can be divided into two periods. The first period (1977-1995) was covered by a series of four-year bilateral protocols through which EU financial assistance was channelled (total financial assistance under the protocols amounted to €661 plus €806 in the form of loans provided by the European Investment Bank (EIB). 

In 1995, it was decided to change the system to enable the Commission and its Mediterranean Partners to adapt their development co-operation activities more clearly to the goals set out in the Barcelona Declaration of 1995 and subsequently included in the Association Agreements signed with each Partner country. To implement the different Association Agreements, it was then decided to fund large-scale programmes in selected sectors, rather than to finance individual projects, as under the protocols. 

The second period (1995 till present) is covered by the MEDA Programme. Total funds committed for Egypt under MEDA I bilateral assistance (1995 -1999) amounted to €686 million (20% of total MEDA I funds €3.424 billion).

The following major programmes are being financed in Egypt under MEDA I regulation (1995-1999).

• The Industrial Modernisation Programme (€250 million)
• Social Fund for Development – Phase II (€155 million)
• Health Sector Reform Programme (€110 million)
• Education Enhancement Programme (€100 million)
• EIB interest rate subsidies for environmental projects (€33 million)
• EIB Risk Capital Guarantees (€29 million) 

The implementation of these programmes is ongoing. 

Between 1997 and 1999 under the first Euro-Med lending mandate, commitments of the EIB in Egypt amounted to €425 million of which €396 million were in long term loans from the EIB own resources and €29 million in the form of risk capital contributions financed from EU budgetary resources.  

In 2000, the European Council adopted a new MEDA regulation (MEDA II) which made available €5.4 billion in grants for the period 2000-2006 for all the Southern Mediterranean countries. Commitments of the EIB for the same period are targeted at €7.4 billion. 

During the first Financial Perspective of the National Indicative Programme NIP (2002-2004), the EU is committing €351 million to Egypt to help finance the following programmes:

• Technical and Vocational Training Reform (€33 million)
• Trade Enhancement TEP-A (€20 million)
• Trade Enhancement TEP-B (€40 million)
• Trade Enhancement TEP-C (€6 million)
• Integrated Local Development – South Sinai (€64 million)
• Social Development and Civil Society (€20 million)
• Financial and Investment Sector Co-operation (€50 million)
• Spinning and Weaving Sector Restructuring (€80 million)
• Higher Education – Tempus (€11 million)
• EIB Interest Rate Subsidies (€25 million)
• Promotion of the Association Agreement (€2 million)

EIB commitments under the Euro-Med II lending mandate (covering 2000-2007) are at the end of 2003 equivalent to €1,014 million divided among €989 million in loans and €25 million risk capital. Over the period covering the two Euro-Med mandates, four loans received interest rate subsidies under the EU budget on environmental ground for an indicative amount of €33 million. 

MEDA II budget programmes are actively supporting the Egyptian government in the implementation of the EU/Association Agreement; the process of economic transition from a command economic to an efficient and liberalised free market economy; and stability and sustainable and balanced socio-economic development.

The payments received by Egypt over the period 1995-2003 amount to €328.5 million as opposed to €879.7 million committed by the EU over the same period. The disbursement rate (ratio of payments/commitments) for Egypt over the period 1995-2002 was nearly 40%, slightly above the average in the region.

Payments on Commission projects and programmes increased by 9.5% in 2003 compared to 2002. Commitments of new projects also increased by 39.1% during the same period.