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BUDGETARY ASSESSMENT (COM(2024)0461 – C100009/2024 – 2024/0071(COD))

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

BUDG-AD-765356

Committee on Budgets · Rapporteur: Matjaž Nemec

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The Committee on Budgets gives a budgetary assessment of the proposed macro-financial assistance to Egypt, concluding it is compatible with Rule 58(3) and proposing amendments. It stresses the need for parliamentary involvement, monitoring, and respect for democratic principles and human rights, and notes the assistance's budgetary implications.

Committee position. The Committee on Budgets concludes the proposal is compatible with Rule 58(3) and submits amendments updating references to the Financial Regulation and adding a recital on the budgetary assessment.

Key points

  1. Recalls that MFA is an exceptional crisis instrument and its increasing use risks diluting its emergency nature.
  2. Regrets that the first proposal bypassed Parliament via Article 213 TFEU and insists this should not set a precedent.
  3. Notes the EUR 4 billion MFA requires EUR 360 million in provisioning under the External Action Guarantee.
  4. Calls for transparent reporting, monitoring mechanisms with clear benchmarks, and regular reporting to the budgetary authority.
  5. Notes the loan structure creates extended contingent liabilities for the EU budget.
  6. Encourages Egyptian authorities to disclose spending information at the Commission's request.
  7. Stresses the proposal lacks sufficient safeguards and benchmarks for compliance with EU values and human rights.
  8. Calls on the Commission to withhold disbursements in the absence of credible progress on democratic principles and human rights.
  9. Regrets Parliament's lack of involvement in the Memorandum of Understanding and its budgetary provisions.
  10. Amendments update references to the Financial Regulation and add a recital on the budgetary assessment.

Who is affected

  • Egypt: subject to conditions and monitoring for macro-financial assistance, with loans up to 35 years.
  • European Parliament: seeks greater involvement in negotiating memorandums and budgetary scrutiny.
  • Commission: responsible for implementing assistance, monitoring reforms, and reporting to budgetary authority.

Figures and deadlines

  • EUR 4 billion in macro-financial assistance proposed.
  • EUR 360 million in provisioning required.
  • Maximum loan duration of 35 years.