EU Approves €4.5 Billion Loan Packages for Egypt and Jordan Amid Economic Struggles

On Tuesday, the European Parliament approved two critical macro-financial assistance (MFA) packages for Egypt and Jordan, with loan agreements totaling €500 million for Jordan and €4 billion for Egypt. These proposals reflect the EU's ongoing commitment to supporting the economic stability of the two nations, which face significant financial and political challenges in an increasingly volatile region.

Egypt's €4 Billion Loan Approval

The MFA for Egypt, which was adopted by Parliament with 452 votes in favor, 182 against, and 40 abstentions, comes at a time when the country is grappling with a severe economic crisis. The EU’s proposal, first introduced by the European Commission on March 15, 2024, aims to provide the country with loans worth up to €5 billion. This financial package includes a short-term loan of up to €1 billion, already disbursed by the end of 2024, and a regular loan of up to €4 billion, which will be distributed in three installments over the coming years.

The decision to grant Egypt this financial aid is largely driven by the country’s critical economic and financial situation. With high inflation, a devalued currency, and a struggling public sector, Egypt has found itself in a precarious position. In addition to its internal challenges, Egypt plays an essential role as a stabilizing force in the Middle East and North Africa, an area marked by geopolitical tensions and uncertainty. The EU sees Egypt’s stability as a key factor in the broader security and peace efforts in the region.

Celine Imart, the rapporteur for the MFA proposal (EPP, France), emphasized the importance of swift action. She stated, “This vote underlines Parliament's support for our partners. The money for Jordan can be delivered quickly, and Parliament will enter into negotiations with member states on the proposal for Egypt with a strong mandate to make a swift agreement.” The negotiations for the Egyptian loan are expected to commence soon between the European Council and Parliament.

Jordan's €500 Million Loan and Ongoing EU Support

For Jordan, the €500 million loan package marks the fourth MFA effort by the EU since 2013. It was approved by the European Parliament with overwhelming support: 571 votes in favor, 59 against, and 46 abstentions. This loan is intended to help Jordan manage its ongoing financial challenges, provide support for structural reforms, and assist with the country's fiscal consolidation efforts.

Jordan has long been a close partner of the EU, receiving significant financial assistance to address its economic needs, particularly its large refugee population resulting from regional conflicts. In January 2025, the European Commission announced an additional financial package to help Jordan tackle its financial and other challenges, particularly those arising from the ongoing refugee crisis and regional instability.

The EU’s financial support for Jordan is contingent upon the country respecting democratic mechanisms, including a multi-party parliamentary system and the rule of law. The respect for human rights is also a pre-condition for receiving EU assistance. The European Parliament has emphasized that these principles must remain central to any further financial cooperation between Jordan and the EU.

Geopolitical Context and EU Strategy

Both loan packages come as part of the EU’s broader geopolitical strategy in the Middle East and North Africa (MENA) region, an area fraught with instability due to long-standing conflicts, the impact of the Syrian civil war, and the rise of extremist groups. Egypt and Jordan are considered important allies in the region, not just for their role in managing their own domestic challenges, but also for their influence on regional peace and security.

The European Union has made it clear that its financial assistance to both countries is not just an act of solidarity but also part of a strategic interest in maintaining stability in a region that has far-reaching consequences for European security. With the EU’s increasing focus on managing migration, supporting democratic governance, and promoting economic resilience in the region, these financial packages are an investment in the long-term stability of the MENA region.

Next Steps

For Jordan, the MFA package now needs to be formally approved by the European Council before it can be disbursed. This step is essential for the finalization of the agreement, and the Council’s approval is expected in the near future. As for Egypt, the next phase involves negotiations between the Council and the Parliament, with discussions anticipated to start soon. The European Commission’s goal is to ensure that the funds are delivered promptly to both nations, with the aim of addressing urgent financial needs and supporting broader political stability.

The European Union’s ongoing financial engagement with Egypt and Jordan underscores its long-term commitment to fostering stability, security, and economic growth in the MENA region. The success of these loan agreements will not only aid these countries in overcoming their immediate financial crises but also contribute to the EU’s broader geopolitical objectives.