Eu, Ethiopia Sign 650M Euro Development Deal

The European Union and Ethiopia have officially sealed a 650 million euro development agreement during a visit by the European Commissioner for International Partnerships, Jutta Urpilainen. This landmark deal aims to foster improved relations between the two entities following the recent conclusion of a two-year conflict in the Tigray region. During the signing ceremony, Commissioner Urpilainen emphasized the importance of normalizing relations and establishing a mutually beneficial partnership with Ethiopia. She stated, "It is time to gradually normalize relations and rebuild a mutual reinforcing partnership with your country." Ahmed Shide, Ethiopia's Finance Minister, joined her in signing the agreement. The agreement, known as the Multi-annual Indicative Programme (MIP), allocates 650 million euros ($680 million) for the years 2024-2027. Originally scheduled for conclusion in 2021, it was suspended due to the Tigray conflict. Commissioner Urpilainen described the MIP as "the concrete first step towards normalization" and emphasized the EU's renewed commitment to supporting Ethiopia's stability, post-conflict recovery, and macro-economic development. Minister Ahmed acknowledged the significance of the MIP for Ethiopia and praised the EU as a strategic partner that has supported the nation's economic development and reform for over four decades. He highlighted the recent slowdown in the partnership due to the Tigray conflict and expressed optimism that the MIP's signing would pave the way for a return to a normal development partnership. While the EU remains one of Ethiopia's main development partners, budgetary aid, suspended since the onset of the Tigray conflict in November 2020, has not been resumed. Commissioner Urpilainen explained that strict conditions, including an International Monetary Fund (IMF) program, must be met before resuming budgetary support. She also noted the existence of unspecified political conditions. The conflict in Tigray resulted in numerous civilian casualties and the displacement of approximately two million people before a surprise truce in November the following year. The EU supports the peace deal's implementation through national dialogue and emphasizes accountability and transitional justice. However, challenges persist in multiple regions across Ethiopia, and the situation remains complex and fragile. During her visit, Commissioner Urpilainen held discussions with Ethiopian Prime Minister Abiy Ahmed and African Union Commission head Moussa Faki Mahamat, though the press was not granted access to these talks.