15/05/2004
Al-Akhbar Newspaper 2004/MAY /15
When the EU expanded to include 25 member states it placed more challenges on the Egyptian economy. As there is uneven strength between the EU and Egypt, compensation for Egypt is through several means. The European market is open to Egyptian exports without tariffs or non-tariff obstacles. There is also a promise from Europe for financial aid for projects and development programs. It is expected that Egypt will profit as it will attract more direct investments from Europe and its exports will increase.(Available in Arabic – German in PDF )
The Egyptian economy is facing more challenges and at the same time it is provided with better opportunities when the EU expanded to include 25 member states. The positive effect is that the new members will open the door for Egyptian exports. Egypt maintains a strategic position and the Egyptian market is important for trade worldwide but it must prepare itself by improving productivity and enhancing the quality of its products. As Egypt chose to enter the arena of globalization it is now necessary to face the challenges. The expansion means more opportunities for the Egyptian economy giving it the chance to double its exports. Egypt will benefit as its exports will be admitted into the markets of the 10 new members without customs contrary to the way it was before they joined where high custom duties were imposed on industrial products. The negative affect is that the new state members suffer from a high rate of unemployment and low wages and they will soon start to infiltrate the EU. A new investment act has been issued encouraging investment in Egypt with liberalization of the exchange rate as the most serious step to attract foreign investments. There is investment fear that European foreign investment might shift from the Mediterranean states to the new member states of the EU.