São Paulo – This Thursday (13th), the European Union offered to loan 700 million euros to Egypt. According to news agency Reuters, the proposal was made to the Egyptian president, Mohamed Morsi, who is on his first trip to the continent this week. “Egypt is a key country in a region that is so close to and important for Europe,” said the European Council president Herman Van Rompuy.
According to the EU president, Jose Maniel Durão Barroso, Egypt has been offered a 500 million euro loan conditional on the approval of a US$ 4.8 billion loan the country has requested to the International Monetary Fund (IMF). Another 200 million euros may be loaned to Egypt in order to fund the country’s economic recovery plan. The EU has already loaned 449 million euros for Egypt to spend on youth training programs from 2011 to 2013.
The country is bidding for loans because the Arab Spring, which led to former president Hosni Mubarak’s ousting in February 2011, has caused tourism revenues and foreign investment attraction to plummet. The European Union forecasts that Egypt should require up to US$ 10 billion in order to bring its budget back to speed.
For the Europeans, the loan offer has a political angle. The EU is Egypt’s main trade partner and the leading foreign investor in the country. Europe wants to become one of the main allies of the new Egyptian government.
*Translated by Gabriel Pomerancblum
