The European debt crisis has dominated the economic debate at the recent World Economic Forum in Davos. Many experts have expressed concerns about continued deterioration of economic conditions in Europe, against the backdrop of failure to reach a resolution to the debt crisis in Greece and lingering uncertainty about the impact of further austerity measures on the growth prospects in Europe. Trade with Europe is crucial to growth in many economies, including the US and China.
Closer to home, Europe is the number one trading partner for Egypt, accounting for approximately one third of its total exports and imports, and is deemed a major source of FDI and financial investments for the country. Hence, the prospects of slow recovery in Europe casts further shadow on the recovery of the Egyptian economy, which is already challenged by post-revolutionary political and economic instability.