Analysis: The EU’s big bet on Egypt comes with a high price and high risks

The European Union over the weekend signed a €7.4 billion “comprehensive partnership” with Egypt, a number well over the €700 million and €210 million deals respectively struck with Tunisia and Mauritania.

The logic behind the three deals is however the same: to inject fresh money to help stabilise a wobbly economy and curb flows of irregular migration. 

As European Commission President Ursuval von der Leyen said from Cairo, Egypt could not be avoided “given your political and economic weight, as well as your strategic location in a very troubled neighbourhood, the importance of our relations will only increase over time”. 

For Egypt, the need is particularly pressing: the country is in the midst of a devastating crisis caused by a perfect storm of high inflation, heavy debt, persistent trade deficit, rising interest rates and a shortage of foreign currency. The woes have been made considerably worse by Russia’s war on Ukraine, which disrupted global wheat markets and pushed food prices to record highs, and the Houthi attacks on the Suez Canal, which have partially deprived Cairo of $10 billion in annual revenues.

The spiralling turmoil led Egypt to request its fourth loan from the International Monetary Fund (IMF) since 2016 worth $8 billion (€7.3 billion). In exchange, the country has agreed to devalue its national currency, introduce a floating exchange rate, slow down its spending on infrastructure and preserve debt sustainability.

The €7.4-billion deal with the EU also has a strong economic dimension: €5 billion in concessional loans to support Egypt’s macro-economic reforms and €1.8 billion in additional investments under the bloc’s neighbouring policy, to boost renewable energy and digital connectivity. On migration management, the agreement earmarks €200 million to crack down on human smuggling and trafficking as part of a wider package of €600 million in non-repayable grants.

At first glance, the €200-million envelope appears small in comparison, especially given that curbing irregular migration is a priority shared by all 27 member states, regardless of their political inclination, and that Egypt currently hosts over 500,000 refugees from nearby countries, mostly Sudan and Syria.

But Brussels sees things holistically: putting cash in one place can spill over into others. Under this thinking, boosting Egypt’s domestic economy can do as much – or perhaps even more – to control irregular migration than boosting actual border controls.

In the past few years, the EU has seen a dramatic rise in asylum applications by Egyptian nationals: from 6,616 in 2021 to 26,512 in 2023, according to the bloc’s asylum agency (EUAA). Most of these claims were registered in Italy (69%), followed by Greece at a distant second (9%). This helps explain why Prime Ministers Giorgia Meloni and Kyriakos Mitsotakis joined von der Leyen’s trip.

Notably, the marked increase in requests for international protection has not corresponded with a proportional increase in recognition rates. The EUAA estimates between 6 and 7% of these requests were successful, a very low number.

“Egyptians who migrate abroad are understood to be influenced primarily by economic factors and the search for employment,” the agency said in a study published in 2022, to explain why most of these applications for international protection were rejected.

The findings note that Egyptians seeking to reach Europe do not depart from Egyptian shores, as maritime borders are carefully guarded. Instead, most travel to Lybia, and then attempt to cross the Mediterranean Sea. A minority opts to fly to Turkey and try to enter the bloc via Bulgaria or Greece. 

Additionally, the agency highlights Egypt’s position as a transit country for migrants coming from the Horn of Africa, who often rely on the same smugglers as Egyptians do.

‘Untied and undesignated’

The agency, however, points out two additional “push factors” that are driving the exodus of Egyptian nationals: the repression of human rights and the “security situation,” a reference to the anti-terrorism campaign in the Sinai peninsula.

Since the 2013 coup, Abdel Fattah al-Sisi, a former general, has strengthened his grip on power, expanded his presidential prerogatives and deepened the military’s role in civilian life, prompting accusations of clientelism, cronyism and corruption.

As a result, organizations like Freedom House, Human Rights Watch and Amnesty International describe Egypt as an authoritarian country where freedom of expression and assembly are legally recognised but severely restricted in practice. Courts, media and the private sector are subservient to the state and discrimination against minorities, such as LGBTQ+ people, Coptic Christians, Shiites and people of colour, is widespread. The reported use of torture and forced disappearance against political critics and dissenters have equally caused international alarm.

During her press conference with al-Sisi, von der Leyen vowed to “promote democracy and human rights” but did not elaborate further.

A Commission spokesperson later said human rights have been part of EU-Egypt relations since the entry into force of the Association Agreement in 2004 and would continue to be so under the reinforced partnership.

“There are many issues that need to be dealt with that require that we work with Egypt. We cannot pretend this country does not exist nor can we simply ignore it,” the spokesperson said, highlighting the work done to bring relief into the Gaza Strip.

The €5 billion in concessional loans will be disbursed under the agreement of “policy reforms,” the executive explained, but the ultimate use of this money, which will be wired straight into the Egyptian treasury, will be “untied and undesignated,” meaning the government will enjoy a comfortable margin of discretion for spending.

This big bet is flawed, says Claudio Francavilla, an associate director at Human Rights Watch, because it is overly focused on the fight against human trafficking and fails to address the rule-of-law decline that has contributed to the economic turmoil and pushed investors away from the country. Both the IMF and the EU statements spoke of the need to restore “confidence” to bring back foreign investment. 

“The economic crisis in Egypt is very, very deeply intertwined with the human rights crisis,” Francavilla told Euronews.

“Egypt has pretty much a military authoritarian leadership that strangles every part of life in the country, including the economy, and through its repression has gotten rid that anything that resembles checks and balances on the power.”

“If you don’t address those issues, you’re simply kicking the can down the road,” he added. “The next crisis is just around the corner.”

Sara Prestianni, director of advocacy at EuroMed Rights, a human rights network, called on the bloc to make a “clear” link between pay-outs and the rule of law. Otherwise, the partnership “risks being only a legitimisation of the authoritarian drift that characterises al-Sissi’s regimes today. So, all these types of reforms, all this cooperation, must be strictly linked to conditionalities of respect for fundamental rights of the rule of law.”

Even if the Egyptian economy were to find a stable footing and Egyptian citizens had fewer reasons to leave their home country, as Brussels hopes under the multi-billion plan, there would still be an unresolved question over the fate of the Sudanese people and other nationalities who have sought refuge in the country or transit through its territory.

The European pressure to decrease irregular departures could encourage the Egyptian authorities to double down on their “repressive tools,” warns Andrew Geddes, the director of the Migration Policy Centre at the European University Institute (EUI), leading to greater suffering for those feeling war-torn nations.

“Asylum seekers in Egypt are very heavily reliant on humanitarian assistance, live in very bad conditions and have high unemployment levels. It’s unlikely that the resources provided by the EU will be directed by the Egyptian authorities to improve this situation,” Geddes told Euronews, calling the partnership a “transactional agreement.”

“The situation for asylum-seekers and refugees in Egypt may deteriorate and, for those that do try to move, the journeys may become even more dangerous and deadly.”