What changed

SHORT JUSTIFICATION

As enshrined in the Treaties, the EU is required to uphold and promote the principles of human rights, democracy and the rule of law in its external action. While acknowledging the importance of the EU-Egypt strategic partnership and the need for MFA-support to Egypt in light of the economic impact of, among others, the current geopolitical situation, this opinion aims to integrate human rights, democracy and the rule of law as core parts of the MFA and to strengthen provisions related to benchmarks, parliamentary scrutiny and transparency. The Rapporteur is pleased that the Foreign Affairs Committee (AFET) confirmed that these founding principles of the EU should form the basis of EU-Egypt relations, and concrete improvement from Egypt in this regard is a precondition for the disbursement of the MFA. Moreover, the vote confirmed that the AFET Committee is convinced that Commission services and the European External Action Service have the responsibility to integrate this approach into the Memorandum of Understanding to be negotiated with Egypt, and report on progress on the specific conditions to the European Parliament and Council. Payment of each instalment should be subject to concrete improvements on human rights, democracy and the rule of law. The Rapporteur has full trust that the competences of the AFET Committee will be integrated into the report of the Committee on International Trade, and will engage with the respective Rapporteur to that end.

AMENDMENTS

(3) In line with the Partnership Priorities, the EU and Egypt are committed to ensuring accountability, the rule of law, the full respect of human rights, fundamental freedoms, promoting democracy, gender equality and equal opportunities as constitutional rights of all their citizens. These commitments contribute to the advancement of the partnership and to Egypt’s sustainable development and stability. The increased and constructive engagement between the EU and Egypt in the last period has opened the path to more meaningful dialogue on human rights related issues. The subcommittee on Political Matters, Human Rights and Democracy, International and Regional issues of December 2022 and the Association Committee of May 2023 provided the institutional platforms to exchange on an array of human rights issues, which the EU would like to continue and build on. The improvement of the human rights situation in Egypt will have a positive impact on EU-Egypt relations.

(3) In line with the Partnership Priorities, the EU and Egypt are committed to ensuring accountability, the rule of law, the full respect of human rights, fundamental freedoms, promoting democracy, gender equality and equal opportunities as constitutional rights of all their citizens. These commitments contribute to the advancement of the partnership and to Egypt’s sustainable social and economic development and stability. The increased and constructive engagement between the EU and Egypt in the last period has opened the path to more meaningful dialogue on human rights related issues. The subcommittee on Political Matters, Human Rights and Democracy, International and Regional issues of December 2022 and the Association Committee of May 2023 provided the institutional platforms to exchange on an array of human rights issues, which the EU would like to continue and build on. AnyA future improvement of the human rights situation in EgyptEgypt, such as improving the rights to freedom of expression, association and peaceful assembly, introducing a moratorium on death penalty, combating torture and enforced disappearances, and improving the conditions of prisons, will have a positive impact on EU-Egypt relations.

Or. en

Amendment 2

Proposal for a decision

Recital 65

Text proposed by the Commission

Amendment

(6) Recalling the geo-political challenges, such as the consequences of Hamas terrorist attacks across Israel on 7 October 2023 as well as the conflict in Sudan, and the strategic importance of Egypt as the largest country in the region and a pillar of stability for the whole Middle East, the Union is embarking on concluding a Strategic and Comprehensive partnership with Egypt as outlined in the Joint Declaration.

(5) The EU recognises Egypt's key role for regional security and stability. Terrorism, organised crime and conflicts are common threats against our security and the social fabric of nations across both sides of the Mediterranean. Therefore, the EU and Egypt have a common interest in strengthening cooperation highlighted in the Partnership Priorities, in full compliance with international law, including human rights and international humanitarian law.

(6) Recalling the geo-political challenges, such as the consequences of the situation in the Middle East, as well as the conflict in Sudan, and the strategic importance of Egypt as the largest country in the region and a pillar of stability for the whole Middle East, the Union is embarking on concluding a Strategic and Comprehensive partnership with Egypt as outlined in the Joint Declaration.

(5) The EU recognises Egypt's key role for regional security and stability, and has a strong interest in preventing short-term economic instability in that country that could have broader consequences as well as benefit geopolitical rivals. Terrorism, organised crime, disinformation, conflicts and persecution of religious and ethnic minorities are common threats against our security and the social fabric of nations across both sides of the Mediterranean. Therefore, the EU and Egypt have a common interest in strengthening cooperation highlighted in the Partnership Priorities, in full compliance with international law, including human rights and international humanitarian law, as well as in promoting joint interests and addressing common challenges.

Or. en

Amendment 3

Proposal for a decision

Recital 96

Text proposed by the Commission

Amendment

(9) Egypt’s macro-fiscal situation has faced significant challenges and deteriorated substantially over recent months, as external pressures have intensified and public debt has increased further, with substantial downside risks to the economic outlook persisting. The repercussions of Russia’s war on Ukraine and of Hamas terrorist attacks against Israel have led to protracted capital outflows and lower foreign currency receipts, notably due to sharply falling income from tourism and Suez Canal proceeds. This is particularly challenging amid Egypt’s difficult fiscal situation, which is characterised by constant fiscal deficits and high and growing debt to GDP ratios.

(6) Recalling the geo-political challenges, such as the consequences of Hamas terrorist attacks across Israel on 7 October 2023 as well as the conflict in Sudan, and the strategic importance of Egypt as the largest country in the region and a pillar of stability for the whole Middle East, the Union is embarking on concluding a Strategic and Comprehensive partnership with Egypt as outlined in the Joint Declaration.

(9) Egypt’s macro-fiscal situation has faced significant challenges and deteriorated substantially over recent months, as external pressures have intensified and public debt has increased further, with substantial downside risks to the economic outlook persisting. The repercussions of Russia’s war on Ukraine and of the situation in the Middle East have led to protracted capital outflows and lower foreign currency receipts, notably due to sharply falling income from tourism and Suez Canal proceeds. This is particularly challenging amid Egypt’s difficult fiscal situation, which is characterised by constant fiscal deficits and high and growing debt to GDP ratios.

(6) Recalling the geo-political challenges, such as the broader consequences of the situation in the Middle East following the Hamas terrorist attacks of 7 October 2023, as well as the armed conflict in Sudan and instability in Syria, and the strategic importance of Egypt as the largest country in the region and a pillar of stability and security for the whole Middle East, the Union is embarking on concluding a Strategic and Comprehensive partnership with Egypt as outlined in the Joint Declaration.

Or. en

Amendment 4

Proposal for a decision

Recital 18 a (new)

Recital 9

Text proposed by the Commission

Amendment

(18a) As enshrined under Article 21 TEU, the Union’s action should be guided by the principles which have inspired its own creation, development and enlargement, and which it seeks to advance in the wider world: democracy, the rule of law, the universality and indivisibility of human rights and fundamental freedoms, respect for human dignity, the principles of equality and solidarity, and respect for the principles of the United Nations Charter and international law.

(9) Egypt’s macro-fiscal situation has faced significant challenges and deteriorated substantially over recent months, as external pressures have intensified and public debt has increased further, with substantial downside risks to the economic outlook persisting. The repercussions of Russia’s war on Ukraine and of Hamas terrorist attacks against Israel have led to protracted capital outflows and lower foreign currency receipts, notably due to sharply falling income from tourism and Suez Canal proceeds. This is particularly challenging amid Egypt’s difficult fiscal situation, which is characterised by constant fiscal deficits and high and growing debt to GDP ratios.

Or. en

(9) Egypt’s macro-fiscal situation has faced significant challenges and deteriorated substantially over recent months, as external pressures have intensified and public debt has increased further, with substantial downside risks to the economic outlook persisting. The repercussions of Russia’s war on Ukraine and of the situation in the Middle East have led to protracted capital outflows and lower foreign currency receipts, notably due to sharply falling income from tourism and Suez Canal proceeds. This is particularly challenging amid Egypt’s difficult fiscal situation, which is characterised by constant fiscal deficits and high and growing debt to GDP ratios. Moreover, instability and uncertainty in Syria would further exacerbate the already existing macro-financial issues for Egypt.

Amendment 5

(19) The Commission should ensure that the Union's macro-financial assistance is legally and substantially in line with the key principles, objectives and measures taken within the different areas of external action and with other relevant Union policies.

(19) As enshrined underin Article 212 TFEU, the Commission should ensure that the Union's macro-financial assistance is legally and substantially in line with the key principles, objectives and measures taken within the different areas of external actionaction, and in particular with Article 2 of the EU-Egypt Association Agreement of 2004 concerning the respect of democratic principles and fundamental human rights and with other relevant Union policies.

Or. en

Amendment 6

(22) A pre-condition for granting the Union's macro-financial assistance to Egypt should be that the country continues to make concrete and credible steps towards respecting effective democratic mechanisms – including a multi-party parliamentary system – and the rule of law, and guarantees respect for human rights. In addition, the specific objectives of the Union's macro-financial assistance should strengthen the efficiency, transparency and accountability of the public finance management systems, the governance and supervision of the financial sector in Egypt and promote structural reforms aimed at supporting sustainable and inclusive growth, decent employment creation and fiscal consolidation. The fulfillment of the pre-condition and the achievement of the specific objectives should be regularly monitored by the Commission services and the European External Action Service.

(22) A pre-condition for granting the Union's macro-financial assistance to Egypt should be that the country makestakes concrete and credible steps towards respecting and enhancing effective democratic mechanisms – including a multi-party parliamentary system – and the rule of law, and guarantees respect for human rights.rights, In addition, the specific objectives of the Union's macro-financial assistance should strengthen the efficiency, transparency and accountability of the public finance management systems, the governance and supervision of the financial sector in Egypt and promote structural reforms aimed at supporting sustainable and inclusive growth, decent employment creation and fiscal consolidation. The fulfillment of the pre-condition and the achievement of the specific objectives should be regularly monitored by the Commission services and the European External Action Service.

Or. en

Amendment 7

(26) The Union's macro-financial assistance should be managed by the Commission. In order to ensure that the European Parliament and the Council are able to follow the implementation of this Decision, the Commission should regularly inform them of developments relating to the assistance and provide them with relevant documents.

(26) The Union's macro-financial assistance should be managed by the Commission. In order to ensure that the European Parliament and the Council are able to follow the implementation of this Decision, the Commission should regularly inform them with an annual report of developments relating to the assistance and on the respect of effective democratic mechanisms, as per the pre-conditions underreferred recitalto 22in andthis Decision and, provide them with relevant documents.

Or. en

Amendment 8

(28) The Union's macro-financial assistance should be subject to economic policy conditions, to be laid down in a Memorandum of Understanding. In order to ensure uniform conditions of implementation and for reasons of efficiency, the Commission should be empowered to negotiate such conditions with the Egyptian authorities under the supervision of the committee of representatives of the Member States in accordance with Regulation (EU) No 182/2011. Under that Regulation, the advisory procedure should, as a general rule, apply in all cases other than as provided for in that Regulation. Considering the potentially important impact of assistance of more than EUR 90 million, it is appropriate that the examination procedure be used for operations above that threshold. Considering the amount of the Union's macro-financial assistance to Egypt, the examination procedure should apply to the adoption of the Memorandum of Understanding, and to any reduction, suspension or cancellation of the assistance.

(28) The Union's macro-financial assistance should be subject to economic policy and democracy, rule of law and human rights conditions, to be laid down in a Memorandum of Understanding, including clear and measurable benchmarks to assess the implementation of the conditions for each instalment.Understanding. In order to ensure uniform conditions of implementation and for reasons of efficiency, the Commission should be empowered to negotiate such conditions with the Egyptian authorities under the supervision of the committee of representatives of the Member States in accordance with Regulation (EU) No 182/2011. Under that Regulation, the advisory procedure should, as a general rule, apply in all cases other than as provided for in that Regulation. Considering the potentially important impact of assistance of more than EUR 90 million, it is appropriate that the examination procedure be used for operations above that threshold. Considering the amount of the Union's macro-financial assistance to Egypt, the examination procedure should apply to the adoption of the Memorandum of Understanding, and to any reduction, suspension or cancellation of the assistance.

Or. en

Amendment 9

Proposal for a decision

Article 1 – paragraph 3 – subparagraph 1

Text proposed by the Commission

Amendment

The release of the Union's macro-financial assistance shall be managed by the Commission in a manner consistent with the agreements or understandings reached between the IMF and Egypt, and with the key principles and objectives of economic reforms set out in the EU-Egypt Association Agreement.

The release of the Union's macro-financial assistance shall be managed by the Commission in a manner consistent with the agreements or understandings reached between the IMF and Egypt, and with the key principles and objectives set out in the EU-Egypt Association Agreement.

Amendment 10

Proposal for a decision

Article 1 – paragraph 3 – subparagraph 2

Text proposed by the Commission

Amendment

The Commission shall regularly inform the European Parliament and the Council of developments regarding the Union's macro-financial assistance, including disbursements thereof, and shall provide those institutions with the relevant documents in due time.

The Commission shall regularly inform the European Parliament and the Council of developments regarding the Union's macro-financial assistance, including disbursements thereof, as well as on the progress made relating to economic and democratic reforms in Egypt, and shall provide those institutions with the relevant documents, including third-party independent assessments, in due time.

Amendment 11

Proposal for a decision

Article 1 – paragraph 3 – subparagraph 2 a (new)

Text proposed by the Commission

Amendment

The transparent management of funds allocated under this macro-financial assistance is essential in order to ensure that resources are used wisely, in accordance with the set objectives. The Union shall ensure that effective and independent control and audit mechanisms are put in place to prevent any misappropriation.

Amendment 12

Proposal for a decision

Article 2 – paragraph 1

1. A pre-condition for granting the Union's macro-financial assistance shall be that Egypt continues to make concrete and credible steps towards respecting effective democratic mechanisms – including a multi-party parliamentary system – and the rule of law, and guarantees respect for human rights.

1. A pre-condition for granting the Union's macro-financial assistance shall be that Egypt takes concrete and credible steps towards respecting effective democratic mechanisms – including a multi-party parliamentary system – and the rule of law, and made a quantitative and substantial improvement in the respect for human rights, since the signing in June 2024 of the Memorandum of Understanding linked to the EUR 1 billion macro-financial assistance package, and that it continues to make concrete and credible improvements in thesethose domainsareas throughout the period covered by this Decision.

Or. en

Amendment 13

Amendment 10

Proposal for a decision

2. The Commission services and the European External Action Service shall monitor the fulfilment of this pre-condition throughout the life-cycle of the Union's macro-financial assistance.

2. The Commission services and the European External Action Service shall monitor the fulfilment of this pre-condition throughout the life-cycle of the Union's macro-financial assistance in a transparent process in which civil society and international entities such as UN organisations are able to contribute, and report, regularly and in writing, to the European Parliament on the conditions referred to in Article 2 (1) and implementation of the applied benchmarks to measure progress.(1).

Or. en

Amendment 14

Amendment 11

Proposal for a decision

1. The Commission, in accordance with the examination procedure referred to in Article 7(2), shall agree with the Egyptian authorities on clearly defined economic policy and financial conditions, focusing on structural reforms and sound public finances, to which the Union's macro-financial assistance is to be subject, to be laid down in a Memorandum of Understanding ("the Memorandum of Understanding") which shall include a timeframe for the achievement of those reforms. The economic policy and financial conditions set out in the Memorandum of Understanding shall be consistent with the agreements or understandings referred to in Article 1(3), including the macroeconomic adjustment and structural reform programmes implemented by Egypt with the support of the IMF.

1. The Commission, in accordance with the examination procedure referred to in Article 7(2), shall agree with the Egyptian authorities on clearly defined economic policy and financial conditions, focusing on structural reforms and sound public finances, as well as on democracy, rule of law and human rights conditions, including benchmarks, to which the Union's macro-financial assistance and the release of each separate instalment is to be subject, to be laid down in a Memorandum of Understanding ("the Memorandum of Understanding") which shall include a timeframe for the achievement of those reforms. The economic policy and financial conditions set out in the Memorandum of Understanding shall be consistent with the agreements or understandings referred to in Article 1(3), including the macroeconomic adjustment and structural reform programmes implemented by Egypt with the support of the IMF.

Or. en

Amendment 15

Amendment 12

Proposal for a decision

2. The conditions referred to in paragraph 1 shall aim, in particular, at enhancing the efficiency, transparency and accountability of the public finance management systems in Egypt, including for the use of the Union's macro-financial assistance. Progress in mutual market opening, the development of rules-based and fair trade, and other priorities in the context of the Union's external policy shall also be duly taken into account when designing the policy measures. Progress in attaining those objectives shall be regularly monitored by the Commission.

2. The conditions referred to in paragraph 1 shall aim, in particular, at introducing reforms towards respecting effective democratic mechanisms - including a multi-party parliamentary system - and the rule of law, and ensuring respect for human rights, enhancing the efficiency, transparency and accountability of the public finance management systems in Egypt, including for the use of the Union's macro-financial assistance. Progress in mutual market opening, sustainable development, poverty reduction, good governance, the fight against corruption, the development of rules-based and fair trade, and other priorities in the context of the Union's external policy, including those relating to democracy, rule of law and human rights, shall also be duly taken into account when designing the policy measures. Progress in attaining those objectives shall be regularly monitored by the Commission.

Or. en

Amendment 16

Amendment 13

Proposal for a decision

(c) the satisfactory implementation of the economic policy conditions, financial conditions, and democracy, rule of law and human rights conditions, agreed in the Memorandum of Understanding.

Or. en

Amendment 17

Amendment 14

Proposal for a decision

Amendment

(ca) outline the concrete and credible steps Egypt has taken towards respecting effective democratic mechanisms –mechanisms, including a multi-party parliamentary system –system, and the rule of law, and towardtowards guaranteeingensuring respect for human rights.

Or. en

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

ANNEX:Pursuant ENTITIESto ORArticle PERSONS8 FROMof WHOMAnnex THEI RAPPORTEURto FORthe OPINIONRules HASof RECEIVEDProcedure, INPUTthe rapporteur for the opinion received input from the following entities or persons in the preparation of the opinion:

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteur for opinion in her capacity as rapporteur for opinion declares that she received input from the following entities or persons in the preparation of the (draft) opinion, prior to the adoption thereof in committee:

Entity and/or person

EEAS

The Egyptian Ambassador to the EU

Various Egyptian authorities on multiple occassion

Amnesty International

Committee to Protect Journalists

The list above is drawn up under the exclusive responsibility of the rapporteur for opinion in her capacity as rapporteur for opinion.

Various Members of the Egyptian Parliament

Where natural persons are identified in the list by their name, by their function or by both, the rapporteur for opinion in her capacity as rapporteur for opinion declares that she has submitted to the natural persons concerned the European Parliament’s Data Protection Notice No 484 (https://www.europarl.europa.eu/data-protect/index.do), which sets out the conditions applicable to the processing of their personal data and the rights linked to that processing.

UNHCR

Save the Children

Frontex

Various diplomats of EU Member States in Caïro

Various local civil society organisations in Egypt

Third country diplomat in Egypt

The list above is drawn up under the exclusive responsibility of the rapporteur for the opinion.

Where natural persons are identified in the list by their name, by their function or by both, the rapporteur for the opinion declares that she has submitted to the concerned natural persons the European Parliament's Data Protection Notice No 484 (https://www.europarl.europa.eu/data-protect/index.do), which sets out the conditions applicable to the processing of their personal data and the rights linked to that processing.

PROCEDURE – COMMITTEE ASKED FOR OPINION

Title

Macro-financial assistance to the Arab Republic of Egypt

References

COM(2024)0461 – C10-0009/2024 – 2024/0071(COD)

Committee(s) responsible

INTA

Opinion by

Date announced in plenary

AFET

13.11.2024

Rapporteur for the opinion

Date appointed

Tineke Strik

14.10.2024

Discussed in committee

3.12.2024

Date adopted

30.1.2025

Result of final vote

+:

–:

0:

59

6

7

Members present for the final vote

Mika Aaltola, Lucia Annunziata, Petras Auštrevičius, Jordan Bardella, Dan Barna, Wouter Beke, Robert Biedroń, Ioan-Rareş Bogdan, Marc Botenga, Grzegorz Braun, Sebastião Bugalho, Danilo Della Valle, Özlem Demirel, Elio Di Rupo, Michael Gahler, Geadis Geadi, Giorgos Georgiou, Raphaël Glucksmann, Bernard Guetta, Rima Hassan, Rasa Juknevičienė, Sandra Kalniete, Łukasz Kohut, Rihards Kols, Andrey Kovatchev, Vilis Krištopans, Nathalie Loiseau, Claudiu Manda, David McAllister, Sven Mikser, Francisco José Millán Mon, Arkadiusz Mularczyk, Leoluca Orlando, Kostas Papadakis, Tonino Picula, Thijs Reuten, Nacho Sánchez Amor, Andreas Schieder, Alexander Sell, Villy Søvndal, Davor Ivo Stier, Sebastiaan Stöteler, Stanislav Stoyanov, Marie-Agnes Strack-Zimmermann, Michał Szczerba, António Tânger Corrêa, Marta Temido, Cristian Terheş, Riho Terras, Hermann Tertsch, Pierre-Romain Thionnet, Sebastian Tynkkynen, Reinier Van Lanschot, Roberto Vannacci, Hilde Vautmans, Harald Vilimsky, Željana Zovko

Substitutes present for the final vote

Jaume Asens Llodrà, Malik Azmani, Engin Eroglu, Sandra Gómez López, Evin Incir, András László, Ana Catarina Mendes, Hans Neuhoff, Nicolás Pascual de la Parte, Chloé Ridel, Tineke Strik, Şerban Dimitrie Sturdza, Ingeborg Ter Laak, Matej Tonin, Ivaylo Valchev, Isabel Wiseler-Lima

Members under Rule 216(7) present for the final vote

Catarina Vieira

FINAL VOTE BY ROLL CALL IN COMMITTEE ASKED FOR OPINION

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