European Commission President Ursula von der Leyen and Egypt’s President Abdel Fattah El-Sisi presenting signed declarations after their summit in Cairo. AFP

Egyptian President Abdel Fattah El-Sisi has signed an agreement with European Commission President Ursula von der Leyen and other EU officials in Cairo, which includes a 7.4 billion euro financial package comprising loan, investment and grant. Leaders from Belgium, Italy, Austria, Cyprus and Greece attended the ceremony. President El-Sisi said, “Your visit today represented a very important milestone in the relations between Egypt and European Union.” He described it as a “paradigm shift in our relationship.” The EU statement after the signing of the agreement said, “The European Union recognizes Egypt as a reliable partner and its unique and vital geostrategic role as a pillar of security, moderation and peace in the Mediterranean, Near East and African region.” The partnership covers six priority areas, political relations, economic stability, trade and investment, migration management, security, and skills’ development. In the package, 5 billion euros is in the form of soft loans, 1.8 billion in additional investment in the framework of EU’s Southern Neighbourhood Economic and Investment Plan, 200 million euros for migration management. Many of the Western news agencies have focused on migration management as a key aspect of the package. Egypt is concerned about the tens of thousands of refugees and asylum-seekers and Europe about the migrants travelling without papers to European countries from Libya. Egypt said that there are nine million refugees in the country, and of them 480,000 are registered refugees and asylum-seekers with the United Nations’ refugee agency. Human rights groups have been critical of the EU deal with Egypt because they feel that this overlooks the El-Sisi government’s rights record, and that the deal also is a way of stopping migrants going over to Europe.

But von der Leyen’s statements at the summit on Sunday shows that the EU is focused on economic relations with Egypt. She said, “You are keen to attract foreign investment, we have investors interested in Egypt, and we have a Memorandum of Understanding on this. So let us press forward with the work in this area.” She also said that “…we can do much more, be it renewable energy, be it digitalization and connectivity, be it the agricultural sector or the water management, just to name a few topics.” She referred to the GREGY (Greece-Egypt) electricity connection which is underway, and how the undersea cable connecting Africa with Greece will help Europe to get power from renewable source. She said that Egypt could become the hub of renewable energy.

It is not surprising that the EU wants to stabilize and strengthen its ties with Egypt because it is the most developed in the region and it has a skilled working population as well as the intelligentsia. Egypt is an influential country in the region. The EU then wants to take advantage of these positive aspects and make friends with Egypt. The United States has not been too enthusiastic about relations with Egypt though it fully supports the El-Sisi government. However, EU’s geographical proximity to Egypt makes it a more interested partner. The EU has much to gain in terms of renewable energy supply from and through Egypt. And at a time when EU investors are looking beyond its own borders, Egypt presents a promising opportunity. The EU has also been forthright in its criticism of Israel’s war in Gaza, and it has been critical of Israel Prime Minister Benjamin Netanyahu’s relentless offensive in Gaza. The economic package and the upgrading of Egypt-EU relationship to strategic partnership is a positive sign. The agreement and the financial package has geopolitical significance than what it appears to be on the surface.