EU foresees no budget support for Egypt (still) in 2014

Like other donors, the European Union is less concerned about the turnout of the presidential elections in Egypt. What the bloc wants is for the government to act on much-needed but long overdue reforms.

By Jenny Lei Ravelo // 29 May 2014

The European Union has not channeled budget support to Egypt since 2012, and this is likely to continue in 2014 unless the new government — now to be led by former military commander Abdul Fattah al-Sisi — meets the bloc’s outstanding conditions. The bloc currently has several programs in place in Egypt focused on the sectors of education, energy, health, transport and water. All of these “continue in principle” but without funding unless “pre-set conditions pertaining to each budget support operation are met,” said Peter Stano, spokesperson to European Commissioner for Enlargement and European Neighborhood Policy Štefan Füle. Some of those conditions: Egypt must demonstrate some level of macroeconomic stability, show budget transparency and oversight, and put in place a “relevant and credible” public finance management reform program. Egypt has not yet fully met these conditions, with the EU refusing to resume budget support to the country. The donor, which channeled 1 billion euros in bilateral aid to the country from 2007 to 2013, said “no new budget support operations have been agreed since 2011 nor are foreseen in 2014.” And Stano clarified that the presidential elections has nothing to do with the resumption of budget support or preparation of future budget support programs to the country. This year, the bloc has three social and infrastructure projects planned in the areas of education and child protection, water or wastewater management, and access to natural gas. Total budget for these projects are still being discussed, but none of them will be provided in the form of budget support, Stano said. The EU’s action falls in line with other donors, such as the French Development Agency, which sees its operations continuing in the country regardless who wins the Egyptian presidency. Read more development aid news online, and subscribe to The Development Newswire to receive top international development headlines from the world’s leading donors, news sources and opinion leaders — emailed to you FREE every business day.

The European Union has not channeled budget support to Egypt since 2012, and this is likely to continue in 2014 unless the new government — now to be led by former military commander Abdul Fattah al-Sisi — meets the bloc’s outstanding conditions.

The bloc currently has several programs in place in Egypt focused on the sectors of education, energy, health, transport and water. All of these “continue in principle” but without funding unless “pre-set conditions pertaining to each budget support operation are met,” said Peter Stano, spokesperson to European Commissioner for Enlargement and European Neighborhood Policy Štefan Füle. Some of those conditions: Egypt must demonstrate some level of macroeconomic stability, show budget transparency and oversight, and put in place a “relevant and credible” public finance management reform program.

Egypt has not yet fully met these conditions, with the EU refusing to resume budget support to the country. The donor, which channeled 1 billion euros in bilateral aid to the country from 2007 to 2013, said “no new budget support operations have been agreed since 2011 nor are foreseen in 2014.” And Stano clarified that the presidential elections has nothing to do with the resumption of budget support or preparation of future budget support programs to the country.

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About the author

Jenny Lei Ravelo @JennyLeiRavelo
Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.

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