INTERVIEW: Strengthening German-Egyptian ties – Egypt – Al-Ahram Weekly
How do you assess the Egyptian-German relationship and what are the main areas of cooperation?
Egypt is a very important partner for Germany and a key country for stability in the Middle East region. This is why German Foreign Minister Annalena Baerbock’s first visit outside of Europe and the United States was to Egypt in February. This was followed by the visit of Secretary of State and Special Envoy for International Climate Action Jennifer Morgan in April. Germany is working intensively with Egypt on COP27.
Other areas of society include culture. There are 400,000 German speakers in Egypt and German schools have several thousand students. The German University in Cairo has 13,000 students who contribute to our cultural and educational relations through training and exchange programs.
What about trade and economic relations?
The economic partnership between Germany and Egypt is both broad and well developed. Germany is currently Egypt’s second largest trading partner in Europe, with a volume of €5 billion. The volume of investments is also increasing. It reached 1.5 billion euros in 2020, a figure which should increase considerably after the signing of large-scale agreements in 2021.
We are very active in the field of energy and electricity production, starting with Siemens’ investment in 2017 in power plants which ensured a surplus of electricity production in Egypt. There are other investments in wind and solar, and in green hydrogen, where we want to make great progress.
In the transport sector, negotiations are continuing for the second phase of the high-speed rail link, a vast project that will be implemented in partnership with Siemens.
Egypt will host COP27 this year…
Climate change is at the heart of the program of the new German government, and the cooperation with Egypt in the run-up to COP27 is very important to us.
There have been numerous meetings between government officials of the two countries to prepare for the conference. Egypt will host COP27 in November and has made huge efforts in transitioning to renewable energy, diversifying energy sources and developing new technologies like green hydrogen.
Several MoUs have been signed by German companies to invest in green hydrogen in Egypt. There is a high demand for energy in Europe, and we need to reduce imports of fossil fuels, mainly from Russia, and look for alternatives. Egypt is one of them.
What are the main investment opportunities for German companies in Egypt and what are the obstacles to overcome?
The cooperation concerns transport and renewable energies, which we wish to develop. German companies are ready to invest more in this sector. Financial institutions like the German Development Bank (KFW) are ready to engage further with Egypt to expand our involvement in renewable energy by offering concessional loans and other financial services.
Germany is also present in the medical and technological market and wishes to increase its investments in these fields.
German companies operating in Egypt (about 1,180 companies) have certain requirements when it comes to facilitating business transactions. They would like to see improvements in the tax system and a simplification of import procedures and documents.
What about the influx of German tourists to Egypt given the pandemic and the Ukrainian crisis?
The war is reducing the number of tourists around the world and Egypt has been hit by the decrease in the number of tourists from Russia and Ukraine.
The number of German tourists to Egypt averaged around 1.8 million a year before the pandemic. The figure then fell, but is now rebounding to around 80-90% of the pre-pandemic total.
The war in Ukraine is having a devastating impact on the global economy. How is Germany coping with this, particularly in terms of energy?
First, I would like to say that there is no justification for Russia’s war against Ukraine, and the Ukrainian government has a legitimate right to self-determination and Russia should respect it. We are all working to convince Russia to find a way out of this escalation and end the war.
Up to 50% of Germany’s gas consumption and 30% of its oil needs come from Russia. When the war broke out, we had to start reducing energy imports from Russia and diversifying our energy sources as quickly as possible.
Germany has already reduced its oil imports from Russia to 10% instead of 30% and is now in favor of an oil embargo. The next step will be to reduce gas imports from Russia and find alternative supplies. Egypt is a possible future exporter, after further development of gas fields in the eastern Mediterranean allows for greater production of liquefied natural gas.
How to avoid the escalation of the war in Ukraine and what to do to limit its humanitarian and economic repercussions?
We don’t want any more escalation in the war. The economic repercussions are not a consequence of European sanctions, they are the result of Russian policies and positions.
We don’t want to divide the world and have a new cold war. Instead, we are doing everything to end this war and end humanitarian suffering, but we need a strong, rule-based world order to sustain peace.
NATO countries are determined to strengthen their defenses and support the eastern members of NATO. All members are clear that we are not engaging in war. What we are doing is supporting Ukraine and its right to self-defense. We deliver certain military equipment to Ukraine, but we are not part of the conflict and we do not want to be part of it.
We are also imposing sanctions aimed at reducing Russia’s economic ability to continue the war and the threat of its spread to neighboring countries like Moldova.
The war is having a serious impact on Egypt, and Germany is ready to help Egypt mitigate the economic effects.
The European Union is ready to give an additional €100 million to support food imports, and Germany will provide an additional €50 million to the World Food Program for its activities in Egypt.
*A version of this article appeared in the May 12, 2022 edition of Al-Ahram Weekly.