EU mulls economic support for Egypt

The European Union is accelerating efforts to solidify a comprehensive economic support agreement with Egypt, amid rising fears of the Palestine-Israel conflict escalating and sparking a new refugee crisis.

Egypt claims that Israel is pressuring Palestinians into Egyptian territory, after two weeks of Israeli airstrike bombardment in retaliation to the Oct 7 attack on Israeli military targets and towns by Hamas militants.

EU officials told the Financial Times that talks had been held in Cairo over the weekend on a proposed EU-Egypt agreement.

Already grappling with heavy debt and a severe foreign currency crisis, Egypt now faces concerns over its medium-term stability and ability to support its 100 million population amid the escalating conflict on its eastern border.

Although the EU's proposed agreement has received informal approval from member state representatives, it will not explicitly tie any EU funding to Egypt's commitment to halt any potential onward migration to Europe or to any influx of Palestinians, those involved in the discussions told FT.

Rather than solely addressing migration, it is understood that the agreement prioritizes funding job creation and aiding Egypt's energy transition, indirectly preventing mass migration to Europe.

European Council President Charles Michel on Saturday joined a peace summit in Egypt and met Egyptian President Abdel Fattah al-Sisi, who had previously made it clear that Egypt would not take refugees from Gaza.

Margaritis Schinas, vice-president of the European Commission, the EU's executive arm, said last week: "We need to engage actively with Egypt to make sure that Egypt gets all the backing they merit for their very important role in the region as a transit country."