European Union (EU) leaders agreed in principle Thursday to pay EUR 3 billion ($3.23 billion) to Turkey over the next two years in return for additional support in stemming migration flows into Europe. The European Commission proposed a plan to give direct grants to Turkey for receiving and hosting refugees. The EU would contribute EUR 500 million to the grant program. The rest of the EUR 3 billion would be paid by EU member states according to size of economy, with Germany, the United Kingdom, and France as the largest donors. Alternatively, that amount could be contributed through unspent EU money, which normally is returned to EU member states and currently stands at EUR 2.3 billion for 2015. “The commission can put forward EUR 500 million, now it’s a question of how to find the rest. But in principle nobody contested this sum,” said German Chancellor Angela Merkel. EU leaders also agreed to host a special summit with Turkey to speed up talks on visa-free travel for Turkish citizens by March 2016 and open negotiations by the end of the year over Turkey’s EU membership bid. In return, Turkey will boost its border patrols in the Aegean Sea and on the land borders with Greece and Bulgaria. [WSJ, 11/12/2015]
US fund aims to increase investment in Egypt to $1 billion over three years
The Egyptian-American Enterprise Fund aims to increase its investments in the Egyptian market to $1 billion, according to the fund’s board member Hani Sarie-Eldin. The fund recently acquired a 20 percent stake of Fawry for e-payments through a deal worth $20 million. Sarie-Eldin said another deal worth $65 million was recently signed, however he refused to provide additional details. Sarie-Eldin said the fund has a capital of $300 million. The fund aims to support financial inclusion and increase foreign and local investment in Egypt.[DNE, 11/12/2015]
Saudi Arabia looks to reform energy subsidy program
Saudi Arabia is studying a program of sensitive energy subsidy reforms to reduce pressure on its economy. One senior official said the government plans to outline how it will gradually lift energy subsidies in January during the public launch of a new national agenda that includes economic, financial, and social reform measures. The government will also start to privatize state companies as it seeks to raise revenues, stem the draining of public money, and boost private sector activity. The official said the kingdom plans to extend existing welfare payments, such as unemployment benefits, to lessen the impact of subsidy cuts on the country’s poor and middle classes. He also said that businesses affected by more expensive electricity, for example, will get cheap loans to lessen the subsidy shock. [FT, 11/12/2015]
Kuwait to boost capital spending in 2016
Kuwait is planning to increase spending on infrastructure in 2016 as it seeks to offset the impact of lower oil prices on economic growth, Finance Minister and Deputy Premier Anas al-Saleh said. The government will reduce current spending (which typically includes subsidies and wages) to shore up public finances, with total expenditure likely be flat compared with 2015, he said. “We are an economy that depends on government expenditure, so if you stop that you go into stagnation,” al-Saleh said. “We have not yet, and we are not planning, to cancel any of our projects or developments as we believe they are the best way to enhance our infrastructure and avoid any economic stagnation.” [Bloomberg, 11/12/2015]
Also of interest
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Iraq oil overtakes Saudi in Europe as OPEC battles rage on | Reuters
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Egypt signs oil and gas exploration deals with Eni | Ahram Online
Egypt’s GASC cancels tender to buy soy oil, sunflower oil | Reuters
Egypt non-oil exports rise 0.5 percent in October | Ahram Online
Improving situation in Tunisia depends on strengthening tourism | TAP
Tunisia’s tourism employment rate falls to less than 20 percent | TAP
Tunisia’s trade deficit falls in first ten months of 2015 | TAP