Decision (EU) 2025/1267 providing macro-financial assistance to the Arab Republic of Egypt

What it is

to provide macro-financial assistance (MFA) to the Arab Republic of Egypt. PROPOSED ACT: Decision of the European Parliament and of the Council. ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council. BACKGROUND: relations between the European Union and the Arab Republic of Egypt are developed within the framework of the EU-Egypt Association Agreement, in force since 2004. The EU and Egypt adopted the latest EU-Egypt Partnership Priorities (2021-2027) at the ninth EU-Egypt Association Council on 19 June 2022. The Partnership Priorities reconfirm the joint aim to address common challenges facing the EU and Egypt, promote joint interests and guarantee long-term stability and sustainable development on both sides of the Mediterranean. The European Parliament adopted by 386 votes to 132, with 49 abstentions, a legislative resolution on the proposal for a decision of the European Parliament and of the Council on providing macro-financial assistance to the Arab Republic of Egypt. Parliament adopted its position at first reading following the ordinary legislative procedure by amending the proposal as follows: The Union will provide Egypt with macro-financial assistance, in the form of loans, of up to EUR 4 billion to support the stabilisation of its economy and a substantive reform programme. The Union’s macro-financial assistance shall contribute to covering Egypt’s balance-of-payments needs as identified in the IMF programme. The macro-financial assistance will be made available for a period of two and a half years from the day following the date of entry into force of the Memorandum of Understanding concluded between the EU and the Egyptian authorities. The financial terms of the EU's macro-financial assistance will be set out in a loan agreement to be concluded between the Commission and the Egyptian authorities. Egypt shall repay the loan, which shall be granted on terms that allow its repayment over a long period, including a possible grace period. The maximum duration of the loan is 35 years. The economic policy conditions and financial conditions agreed with the Egyptian authorities are intended, in particular, to strengthen the efficiency, transparency and accountability of Egypt's public financial management systems, including for the use of the Union's macro-financial assistance. Progress in mutual market opening, including for small and medium-sized enterprises, the development of rule-based and fair trade, sustainable development, good governance and other priorities in the context of the Union’s external policy shall also be duly taken into account when designing the policy measures. In an annual report to Parliament and the Council, the Commission will examen progress, assess Egypt's economic prospects and evaluate the impact of the loans on the economic and budgetary situation. The report should also contain information on concrete, tangible and credible measures taken by Egypt towards respecting effective democratic mechanisms , including a multi-party parliamentary system, and the rule of law, and guaranteeing respect…

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