What does the EU have to offer local businesses? Pierre Loza finds out "It is in our best interest to have a strong partner, we can do business with. So in assisting Egypt and its government we are also assisting ourselves," stressed Klaus Ebermann, EU ambassador and head of the European Commission (EC) delegation in Cairo, earlier this week. Speaking at a conference organised by the Confederation of Egyptian European Business Associations (CEEBA), Ebermann wanted to get a point across: the EU rejects the view that initiatives like financial assistance represent Europe's appetite for charity. Previously stationed in China, Eberman witnessed first hand the positive impact of an EU China Science and Technology Agreement. For that reason, he is very optimistic about the signing of its equivalent in Egypt within two weeks time. Under the umbrella of the European Mediterranean Partnership, financial cooperation between the EU and its Mediterranean partner countries is implemented through the MEDA programme. Offering financial, as well as technical support, the programme aims to promote socio-economic reforms in EU- Mediterranean partner nations. Pointing out the EU's work in the construction and technological upgrading of Egyptian schools, Ebermann believes that there is still much work to be done in areas such as vocational training. With diverse initiatives in everything from micro-credit, to SME advisory and training offices, Ebermann believes that projects like these will help Egypt gain greater access to the European market. "Initiatives taken under the Industry Modernisation Programme (IMP) are aiming at reaching higher levels of quality, and standards that will be competitive in the word market," he said. On his part, the Netherlands Ambassador Tjeerd Zamaan, briefly addressed the question of the recent rejection of the European constitution. "Amidst all the excitement and confusion, what needs to be pointed out is that Europe will continue to tic and will continue to shine," he stated. During the conference Egyptian Minister of International Cooperation Fayza Abul- Naga voiced her disappointment with MEDA's first phase from 1995 to 2000. However, Abul-Naga believes that from 2000 onwards the programme has improved considerably. "I am not going into the details of whether we have fully benefited from the MEDA programme, I have my doubts about that," she said. During its first phase, Egypt's utilisation of MEDA funding fell short of most expectations. Abul-Naga also praised the EC's policy of swapping debts, which provides incentives for development. She commented that Egypt has made use of this policy and has swapped close to a billion euros in debt with countries like Italy, Germany and Switzerland." A presentation about EC programmes which are useful to business, was given by Georgios Tsitsopoulos, EC first counsellor and head of Operations. Initially funded by 250 million euros, the Industrial Modernisation Programme (IMP) was considered the largest European programme outside its frontiers. Initially plagued by a myriad of problems, he believes the adjustments made over the last three years have played a major role in improving its performance. "We reviewed the financing agreement. Two hundred and fifty million euros were allocated to technical assistance, an amount which is too huge to be absorbed in the duration of the financing agreement," he explained. The reduction of technical assistance to 75 million euros and the provision of 175 million euros for budgetary support, have according to Tsitsopoulos catalysed the new spur of activity within the programme. Based on the European Social Model, IMP places a strong emphasis on small and medium enterprises. Business Resource Centres that span cities like Alexandria, 10th of Ramadan and 6th of October, provide much needed technical assistance throughout its 10 branches. "SMEs can get tailor-made assistance with respect to marketing, production, management, accounting, export promotion and quality" said Tsitsopoulos. The IMP also intervenes on behalf of Egyptian firms in the facilitation of European quality certifications. So far, the IMP has helped 260 Egyptian firms get quality certification from Europe. A cost sharing component of about 15-30 per cent allows for the sustainability of quality Business Resource Centre's delivery. An agreement signed between the IMP and the Credit Guarantee Company (CGC) will establish a 10 million euro guarantee fund for SMEs. Therefore, when an SME goes to affiliate banks for a loan, 50 per cent of the loan can be guaranteed by this fund. The aforementioned Business Resource Centres will also play a role in helping SMEs prepare solid files for bank loans. Aiming to develop a national quality plan, IMP is working closely with the Ministry of Industry and Foreign Trade. Covering everything from the harmonisation of standards and the strengthening of accreditation bodies, to the upgrading of laboratories. There are currently 180 laboratories being upgraded with technical and financial assistance from the IMP. Matchmaking between European and Egyptian businesses is also coordinated by the IMP. The IMP's Information Correspondence Centre (ICC) provides Egyptian enterprises with business opportunities in the European Union and vice versa. Information about European quality measures, regulations and standards are also readily available for Egyptian firms interested in gaining access to the European market. Through measures agreed upon with the Egyptian government, the IMP budgetary component has committed the Egyptian government to reforming its budgetary logistics. "This will render the budget presentations in line with acceptable international standards and increase fiscal transparency," Tsitsopulos stated. The new budget will consolidate a number of previously unmentioned expenditure items such as subsidies. The EC is also active in the privatisation of government banks, such as the Bank of Alexandria. A review of tax and customs legislation as well as the easing of bankruptcy procedures is also in the pipeline. A recent decision by the Egyptian Ministry of Foreign Trade and Industry to prolong the implementation of the programme beyond the expiration of the financing agreement has been welcomed by the EC. Many believe that by utilising funds from its budgetary component, the EC programmes in Egypt will move full thrust ahead. With EU--Egyptian cooperation being the EC's fifth largest in the world, the future of this strategic relationship seems to be getting all the more cozy.
