Written by Giuseppe Adamo, Bartosz Mirowski, Maciej Pawłowski
Thesis and Introduction
Confused for respective years in the economical crisis, Egypt is an example of a country besides large to fall. The EU makes a number of efforts to avoid falling into the sphere of another countries' influence, recognising that, despite all the difficulties in cooperation, it is an crucial partner in the fight against illegal migration, electricity supply and stableness in the region. The country is besides a logistics centre in relations between the EU and Africa and the Gulf countries. Its location is strategical for global trade.
Relations with Europe
On 17 March 2024, Egypt and the EU concluded a strategical Partnership Agreement on the basis of the Association Agreement of 2004. Partnership is based on 6 pillars: political relations, economical stability, trade and sustainable investment, migration and mobility, safety and people and competences. Moreover, between 2024 and 2027, the EU will lend EUR 5 billion to Egypt, invest EUR 1.8 billion in the improvement of the Egyptian economy and grant EUR 600 million, including EUR 200 million for migration management. The granting of these measures to Egypt is intended to exit the country from the economical crisis and avoid entering the sphere of influence of the Gulf States, Russia or China.
EU backing is besides intended to turn Egypt into a destination country for migration of people from Sub-Saharan Africa. It is presently a transit country for migrants wishing to scope the EU from the Horn of Africa and Palestine. There are over 6 million citizens of Sudan and South Sudan in Egypt. many immigrant groups are besides Palestinians, Somalis, Ethiopians and Eritreans. Egypt combats illegal migration to the EU under agreements with Germany, Italy, Greece and Cyprus. Egyptian-Italian cooperation has been ongoing since 2000 (another agreements in 2007 and 2009). The Egyptian-Greek-Cyprus Agreement was concluded in 2015 and the Egyptian-German Agreement was concluded in 2017. On the basis of these agreements, the Egyptian Coast defender prevents the boat from leaving its territory with migrants.
The EU is Egypt's largest trading partner, liable for 22% abroad trade. The full value of trade in goods was 32,5 EUR billion in 2024, a fall of 0.7% compared to EUR 32.7 billion in 2023. The export structure is mainly composed of hydrocarbons, as well as agri-food products, fertilizers, and textiles. On the another hand, EU imports include mainly machinery, industrial products and chemical products. Egypt is an crucial marketplace for European capital, for example German, or French companies investing in Suez Canal economical Zone, there are logistics facilities with global participation (e.g. a car terminal at East Port Said). Since 2021, the Katowice peculiar economical region has been cooperating with the Suez Canal economical Zone.
Energy connections with the EU
Egypt in 2025 remains 1 of the key energy players in Africa and the Mediterranean region. Mix The country's energy is inactive mainly based on natural gas, which accounts for more than 80% of electricity production. Renewable sources, specified as solar, wind and hydroelectric farms in the Nile, supply about 12-15 % of the power and the government announces further investments in cooperation with abroad partners and the European Union to gradually increase their share.
The improvement of cross-border connections is simply a priority. In 2024 Egypt and Greece signed an agreement to build an offshore power cable about 1400 km long. Draft GREECE will let exports of up to 3000 MW of green energy from Egypt to the Greek marketplace and beyond to the EU. Cairo hopes that this merger will strengthen its function as an energy hub for Europe.
The improvement of the gas marketplace is equally important. Egypt is the host East Mediterranean Gas Forum a cooperation platform including Cyprus, Israel and EU countries. The Forum coordinates the export of gas from the Levant basin to Europe, partially through Egyptian LNG terminals. The EastMed gas pipeline task discussed for years to connect Israel, Cyprus and Greece is inactive at the phase of economical and political analyses, although Cairo actively supports the initiative.
Water issues stay as strategical as energy. Egypt suffers from chronic water scarcity that deepens construction The large Rebirth Dam Ethiopia. Launched in 2025, a hydroelectric plant with power of over 5000 MW limits the flow of the Blue Nile, which Cairo and Khartoum consider existential threat. Despite many rounds of negotiations, a binding agreement on tank filling could not be concluded.
Alternative concepts are emerging, including even the thought of building a water supply from Europe to Egypt, but experts point to their impresibility due to costs and distance. In practice, Cairo invests in desalination and modernisation of irrigation systems, as confirmed by Ministry of Water Resources. These projects are intended to reduce the deficit that already reaches billions of cubic metres a year.
In addition, Egypt signed an agreement in 2025 with BP which provides for 5 fresh gas wells in the Mediterranean to increase local mining and reduce import dependency deep.
Egypt is so facing a twofold challenge: to modernise the energy sector and to guarantee water security. The effectiveness of investments in RES, transmission infrastructure improvement and water diplomacy depends on whether Cairo has established their strategical position as a partner for Europe in the coming decades.
Infrastructure connections
Egypt remains a key partner for the EU in maintaining the liquidity of global supply chains. Control over the Mediterranean Sea axis – The Red Sea through the Suez Canal creates a natural bridge between Asia, Africa and Europe, which is simply a logistics hub of planet trade. Suez Canal is liable for 12-15 % trade worldwide and 30% container transport. In the first half of 2023, the strait flowed on average 9.2 millions of barrels of oil per day, representing 9% of global demand. As delicate as this place is, the incidental involving the always Given container ship in 2021 was best shown, and the Hutich attacks on cargo ships in 2023.
Since 2016, the government has implemented the Egypt imagination 2030 strategy, which treats transport infrastructure modernisation as 1 of the priorities. The expansion of ports and logistics centres is to make the state independent of fluctuations in global trade and reduce operational risks. As part of the transport policy for the period 2024-2030, the improvement of the hinterland has besides been a priority. Egypt has consistently developed a strategy from port to interior of the country, based on a network of dry ports and logistics zones. They are to unlock bottlenecks in handling the goods and shorten the check-in time. The plan provides for the creation of 31 dry ports and logistics zones and the construction of 7 integrated transport corridors, connecting main production centres with seaports.
Parallel high-speed rail network with dimension 2000 km It will connect 60 cities and let about 500 million journeys per year. The railway is to connect the port of Ain Sokhna in the Red Sea to the Mediterranean coast and advanced Egypt. task worth more than 8 billion USD realizes Siemens. It will yet include 41 Velaro high-speed trains, creating the world's sixth largest high-speed rail network. In 2024, advancement in work and transportation of the first warehouses was confirmed. The plan involves complete integration of railways into the fresh capital in the future.
One accelerator for economical change and the expansion of Egypt's infrastructure is tourism. In 2024 the country visited evidence 15.7 million tourists (14.9 million A year earlier). This figure is expected to be set at 2030 30 million A year. It will aid to make the offer – the beginning of the Grand Egyptian Museum, the modernization of the Giza area, the expansion and modernization of many resorts. It is estimated that the tourism sector is liable for ca. 8.5% GDP of Egypt and provides 2.7 million jobs.
The controversy was triggered by last year's decision to sale the coastal village of Ras el-Hekma to the United arabian Emirates for 35 billion USD. Egypt retained 35% of its stake in the venture. In addition, the UAE Fund declared investments of value 11 billion USD in the real property sector and another projects in the country. It is the largest direct abroad investment in a urbanist task in modern Egyptian history.
The 170 million m2 complex is designed to transform the seaside town into a fresh generation city – with tourist facilities, work free and investment region and extended residential, commercial and recreational infrastructure. While Abu Dhabi presents the transaction as a strategical partnership, in Egypt it creates controversy and criticism regarding the transfer of a key region to abroad investors at the expense of local improvement needs and home entrepreneurs.
Conclusion
Egypt has a strategical position in planet trade and is crucial for migration to the EU. It is crucial that the country remains politically and economically unchangeable and cooperates with the EU and the USA. In this regard, it is peculiarly crucial that president Sisi and the country's military elite keep power. Despite all the imperfections and inefficient economical governance, they are able to guarantee national security, effectively combat muslim extremists, defend the rights of spiritual minorities and be a predictable partner for the EU. In the event of the collapse of the Sisi regime, all these factors can be rapidly changed, as was the case between 2011 and 2013. At the time, Egypt ruled by the Muslim Brotherhood was an unstable country, supporting regional terrorism and violating citizens' individual freedoms conducive to migration to the EU.
It is in the interest of the EU to defend the Suez Canal and the Red Sea as a delicate area for the global economy. At the same time, additional trade routes and fresh infrastructure connections must be built. large investment can besides be a way to get Egypt out of the economical crisis.
Egypt can be an energy supplier to Europe if it meets its needs first. In this respect, it is crucial to make the east Mediterranean Gas Forum and proceed mining work in the east Mediterranean.
