European Union agrees to €5 billion aid package for Egypt
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The EU will send a €5 billion aid package to Egypt to help rebuild the economy, it was announced Wednesday, in a deal finalised in Cairo between Egypt’s President Mohamed Morsi and the EU's Foreign Policy Chief Catherine Ashton.
The European Union has approved a 5.0 billion euro ($6.4 billion) financial aid package to Egypt after its economy was battered by a 2011 uprising that toppled Hosni Mubarak, the presidency said on Wednesday.
The European Investment Bank will grant Egypt 2.0 billion euros and the European Bank for Reconstruction and Development a further 2.0 billion euros, while EU countries will come up with 1.0 billion euros, the presidency said.
The announcement came after President Mohamed Morsi met EU foreign policy chief Catherine Ashton in Cairo.
It is "a strong sign of the EU's support for Egypt's path to development," the presidency said in a statement.
Ashton, who attended a meeting of EU and Arab foreign ministers on Tuesday, is also participating in the EU-Egypt task force which aims at bolstering economic relations between Egypt and Europe.
Representatives of around 100 large European companies and members of the European Commission and European MPs are participating in the meetings that wrap up later on Wednesday.
Egyptian Finance Minister Mumtaz Said said last week that Egypt may reach a loan deal with the International Monetary Fund next month for $4.5 billion, instead of the $4.8 that Cairo had hoped for.
Following a visit by IMF Managing Director Christine Lagarde in August, officials started working on a proposed plan to support the economy, which has been beset by serious difficulties since the 2011 uprising.
Political instability has badly affected Egypt's major revenue earner, tourism, and has led to a drop in foreign investments, worsened the budget deficit and sparked social conflict.
The central bank's currency reserves plunged, threatening Egypt's ability to import commodities and support the Egyptian pound.