Mubarak in Germany: Good news, bad news

Published April 23rd, 2001 - 02:00 GMT

Hosni Mubarak’s trip to Germany this week will be the first leg of a European tour, which will also take him to Romania and Russia. Arriving in Berlin on Tuesday, April 24, he will meet with German Chancellor Gerhard Schroeder, to hold talks focusing on the worsening situation in the Middle East. However, apart from the political track, one of the main subjects on the table will be boosting of German investments in Egypt and increasing Egyptian exports to Germany.  


At first it seemed that Mubarak’s visit to Germany would be getting off to exactly the type of start that the Egyptian president was hoping for. But then it became clear that the optimistic mood was somewhat premature.  


Stung by the news that Britain’s Sainbury’s supermarket chain was selling off its Egyptian assets at a substantial loss, economic policy-makers were heartened on Thursday, April 19, to hear from a diplomatic source that the giant German distribution chain Metro had agreed to develop a network of 15 bulk-sales stores in the country, dealing mainly in locally produced items, with an overall investment of DM 200 million marks ($92 million).  


Indeed, on Thursday, the only possible problem facing the project was the fact that the German company may have to operate in Egypt under another name, because there already is a distribution company trading under the Metro name. On Friday, though, it appeared as if there might be several more problems in the works. Speaking to AFP, a spokesperson for Metro said that, while the German company had been conducting discussions with the economics ministry in Cairo, at this stage it had made no concrete plans to establish a distribution network in Egypt. 


A report recently issued by the Minister of Economy and Foreign Trade Youssef Boutros Ghali, describes Germany as one of Egypt's most important trade partners in the 15-member European Union. It also notes that Egypt is the third largest recipient of German financial and technical assistance.  


At present, the German government is aiding 148 investment projects in Egypt, with a combined capital of LE 3.913 billion. German assistance allocated to Egypt in 2000 totaled DM 110 million, including DM 21.2 million as a non-refundable grant. The remainder involves a soft loan, in addition to technical assistance worth some DM 15 million. 


According to Al-Saeed Fuad Qassim, a senior Egyptian trade official, the volume of trade exchange between the two countries hit DM 4.3 billion in 1999. The trade balance was heavily weighted in favor of the European nation, with German exports equaling DM 3.8 billion, and Egyptian exports equaling DM 465.7 million. 


However, noted Qassim, a sharp increase in Egyptian exports to Germany took place during the first half of 2000, when DM 550 million worth of sales were recorded. Credit for this, he added, is due largely to the activities of Egypt’s trade representation office in Berlin.  


Egypt's most important exports to Germany are yarn, garments, cotton products, potatoes, aluminum ore and iron ingots. German exports to Egypt include plastics, electronic and chemical products, machinery, automobiles and meat.  


According to Peter Gopfrisch, the director of the Arab-German Chamber of Commerce, a number of major German infrastructure companies a looking to invest in Build, Operate, and Transfer (BOT) projects in Egypt, including railway and highway construction and the development of an airport to serve the Sixth of October City.  


Egypt already has a number of signed agreements with Germany regarding investment encouragement and protection from 1974 and prevention of dual taxation, signed in 1981. — (Albawaba-MEBG)

© 2001 Mena Report (

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