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Brussels, 23 April 2009

European Neighbourhood Policy – EGYPT

“The partnership between Egypt and the European Union continues to grow stronger, as evidenced by our increasingly active cooperation across a broad range of issues of mutual interest" said Benita Ferrero-Waldner, Commissioner for External Relations and Neighbourhood Policy. “I am satisfied that we can already note some progress in advancing our joint Action Plan, and I encourage Egypt to continue working towards its full implementation, including in the areas of political reform, human rights and democracy.”

EU–Egypt relations: basic facts

The EU-Egypt Association Agreement entered into force in June 2004, replacing an earlier 1977 Cooperation Agreement. The current agreement provides a framework for the political, economic and social dimensions of the EU-Egypt partnership, having as its main goals the creation a free trade area over a period of twelve years, helping to increase economic growth, and strengthening political dialogue.

The ENP Action Plan, adopted in March 2007, identifies reform priorities and their sequencing within Egypt’s own agenda of reforms.

In April 2008 Egypt presented a request to enhance relations with the EU.

Major developments in 2008

Egypt is an active ENP partner, especially in the different sub-committee meetings which discuss progress towards advancing the Association Agreement and the Action Plan. While the process of implementation has clearly started in earnest, the EU and Egypt find themselves only at the beginning of ENP engagement and much work lies ahead. Overall progress in 2008 can be summarized as limited but encouraging, with a stronger commitment demonstrated to social, economic and sector reforms, and to a lesser commitment to political reform.

Egypt is an active contributor to the Middle East Peace Process, in particular through its mediation efforts between the Palestinian factions. Egypt also contributes to peace-keeping forces in Darfur (including a military field hospital) alongside UN/AU forces. Egypt holds the co-Presidency of the Union for the Mediterranean, significantly enhancing its role in the reinforced Euro-Mediterranean Partnership.

In 2008 Egypt made good progress in advancing women’s and children’s rights, particularly with the introduction of measures against female genital mutilation and the adoption of a new Child Law in June 2008 to strengthen the rights of the child in line with international standards.

Achievements were further noted in the promotion of the role of women in social and economic life. In April 2008 Egypt became one of the first countries in the world to ratify the Convention of Rights of Persons with Disabilities.

The Commission’s report noted that no significant progress was made as regards the independence of the judiciary, although some progress was made to modernise the administration of justice. Limited progress was achieved in the fight against corruption, ensuring freedom of expression and independence of the media, asserting the right of assembly and freedom of association, guaranteeing freedom of religion, improving prison conditions and tackling torture and ill-treatment.

Progress was achieved in the area of economic reform, particularly on fiscal and monetary policy and on general economic liberalisation, which was complemented by the establishment of fast-track economic courts in October 2008 The new courts aim to improve the predictability and rapidity of rulings in areas such as intellectual property rights, anti-monopolies, competition, capital markets and banking. Provisions have also been made for a dispute resolution panel based upon pre-court conciliation. In 2008, the Central Bank of Egypt implemented the Basel II principles for effective banking supervision.

The EU remained Egypt’s first trading partner in 2008 with 35% of total volume. During the year Egypt’s exports to the EU rose by 13.1%, while EU exports to Egypt increased by 22.2%. Total trade volume with the EU in 2008 was €20.66 billion. Trade negotiations on agricultural, processed agricultural and fish and fishery products were concluded in June 2008. Bilateral negotiations on the liberalization of services and establishment started in early 2008. Negotiations on dispute settlement mechanisms continued in 2008.

Good progress was made in promoting access to primary education, access to primary healthcare and the introduction of health insurance for the entire population.

Egypt and the EU enhanced their energy cooperation inter alia by the signature of a Memorandum of Understanding on a strategic partnership on energy in December 2008. Egypt is a significant oil producer and the sixth largest natural gas supplier of the EU.

How is the EU supporting reforms in Egypt?

In June 2008 Egypt signed an agreement with the European Commission for EUR 120 million of support to education reform, which targets improved access, quality of education and gender equality in schools. This effort builds on a previous education sector reform package which received €100 million of EC support under an assistance programme that concluded in 2006.

Institutional capacity building remains a priority. Egypt continues to make good use of the Twinning instrument and the possibilities offered under Taiex, such as study trips and experts’ workshops that facilitate the sharing of EU experience in a wide range of policies. A total of 14 Twinning projects are currently being implemented, of which 10 were launched during 2008. Twinning projects cover sectors such as transport (maritime, road, railways), tourism, postal services, telecommunications, statistics and environment. Egypt became the first Mediterranean partner country to take part in the Support for Improvement in Governance and Management (SIGMA) in 2008. This instrument focuses on policy development and decision making, public internal financial control and audit, as well as modernisation and development of public services.

Implementation of the Memorandum of Understanding on a strategic partnership on energy will enhance EU-Egypt energy cooperation in key areas such as energy market reforms, promotion of renewable energy and energy efficiency, as well as the development of energy networks. In May 2008 the EC and Egypt held a workshop on nuclear safety and security. A nuclear safety cooperation programme was developed to support capacity building of the Egyptian Atomic Energy Authority and its Nuclear Radiation and Regulatory Authority (starting in 2009). The EC further supports the Egyptian Electric Utility and Consumer Protection Regulatory Agency: a long term technical assistance (approximately €700,000) has been prepared and will be launched in 2009 in order to contribute to the regulator’s capacity-building.

Assistance to Egypt

Egypt is one of the main beneficiaries of EU support in the region, while the EU is one of Egypt’s largest donors. For 2007-2010 a total amount of €558 million (and additional €10 millions for education) has been allocated under the European Neighbourhood Partnership Instrument (ENPI) to support Egypt’s reform process, reflected in the priorities jointly agreed in the ENP Action Plan.

In 2008 Egypt received €149 million to strengthen national efforts to improve good governance in public administration; to support both state institutions and civil society organizations in the promotion and protection of human rights; to support a policy support programme aimed at improving access and quality of transport; to further strengthen the Education Sector Policy Support Programme and to provide investment financing and technical assistance to the Improved Water and Wastewater Services Programme (IWSP).

In addition, contributions were approved in 2008 for projects in Egypt under the Neighbourhood Investment Facility (NIF), committing €10 million in grant support and €5 million in technical assistance, expected to leverage €420.5 million in loans from European Finance Institutions for the IWSP and the El Zayt Wind Farm project.

The Communication from the Commission to the Parliament and the Council Implementation of the European Neighbourhood Policy in 2008 (23 April 2009) and a country report on Egypt are available at

More on Egypt and ENP

See also IP/09/625 EU reinforces ties with its neighbours and continues to support their reforms.

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