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DRAFT 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-PA-765356

Committee on Budgets · Rapporteur: Matjaž Nemec

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The Committee on Budgets assesses the proposal for macro-financial assistance to Egypt, concluding it is compatible with budgetary rules while raising concerns about democratic oversight, conditionality, and safeguards.

Committee position. The Committee on Budgets concludes that the proposal is compatible with the elements referred to in Rule 58(3) of the Rules of Procedure, while expressing concerns and recommendations.

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's co-decision rights by using Article 213 TFEU instead of Article 212 TFEU.
  3. Notes the proposal requires EUR 360 million in provisioning under the External Action Guarantee from the Neighbourhood, Development and International Cooperation Instrument – Global Europe.
  4. Recalls concerns about MFA conditionality effectiveness but acknowledges linking assistance to the strategic partnership framework could provide stronger leverage.
  5. Calls for transparent and timely reporting and strengthened monitoring mechanisms given the unprecedented size of the package.
  6. Emphasises that MFA is general budgetary support and the EU has no control over how funds are spent.
  7. Regrets the lack of sufficient safeguards and benchmarks to ensure compliance with the Charter of Fundamental Rights and EU values.
  8. Concerned that the proposal weakens democratic preconditions by transforming them into ongoing conditionality, potentially allowing disbursements before sufficient reforms.
  9. Emphasises that respect for democratic mechanisms, rule of law and fundamental freedoms should remain non-negotiable prerequisites for EU financial support.

Who is affected

  • Egypt: receives macro-financial assistance of up to EUR 4 billion, subject to conditions and monitoring.
  • European Commission: responsible for implementing assistance, monitoring reforms, and ensuring compliance with EU values.

Figures and deadlines

  • EUR 4 billion: proposed macro-financial assistance to Egypt.
  • EUR 360 million: provisioning required under the External Action Guarantee.
  • USD 17.7 billion: Egypt's external financing gap for 2024-2027.
  • 95.9% of GDP: Egypt's public debt at end of 2022/2023 fiscal year.
  • 88.5% of GDP: Egypt's public debt previous fiscal year.