NEW YORK // Egyptian president Abdel Fattah El Sisi has had a good week.

Newly proposed US foreign aid legislation free of political restrictions and a trip to Europe that has paid sizeable economic and diplomatic dividends have made clear that – for now at least – the momentum for repairing frayed ties with Cairo in the wake of Middle East chaos is showing no signs of slowing down.

After refusing for months to invite Mr El Sisi to Germany on a state visit, chancellor Angela Merkel held talks with the Egyptian president in Berlin on Tuesday. While she said there are differences over Egypt’s domestic policies, such as the spate of death sentences for political opponents, the emphasis was not on criticism but common core security interests.

“I think that if one wants to be partners and solve complex issues, we have to be able talk about these things ... this doesn’t mean that we can’t work very, very closely on other issues,” Ms Merkel said, capturing the international sentiment.

The German leader’s previous position may have been tempered by the economic opportunities that Egypt offers German firms. A central aspect of Mr El Sisi’s European trip has been to promote economic ties, and his delegation also held meetings with representatives of major German corporations. It was announced that Egypt had awarded Siemens a record 8 billion euro (Dh32.7bn) contract to supply gas and steam power to significantly increase Egypt’s electricity generation.

On Friday, Mr El Sisi held bilateral talks with the Hungarian prime minister, Viktor Mihaly Orban, in Budapest, to discuss economic cooperation and counter-terrorism and security.

Egypt is key for a stable Middle East, and “since distances in the modern world have shrunk ... there is no stability in Europe without a stable Egypt,” Mr Orban said.

In Washington, US relations with Egypt had hit a low in 2013 after Mr El Sisi, then a military commander, overthrew Egypt’s conservative president, Mohammed Morsi, after massive protests against his rule grew. US president Barack Obama suspended the annual $1.3bn (Dh4.8bn) in military aid that the United States has given to Egypt since it signed a peace deal with Israel in 1979.

Many within the Obama administration believed, as they still do, that the stifling of political dissent and the crackdown on the Muslim Brotherhood will eventually lead to a new generation of radicalised Egyptians who will pose a security threat to the US, Egypt and the region.

The freeze in the aid deeply angered Egyptian officials who were infuriated that, as they saw it, the administration withheld crucial equipment while they fought extremists in the Sinai Peninsula and on the border with Libya.

But since the rampage of ISIL extremists across the region over the past year, the White House has steadily lifted the holds on aid out of security concerns. The only hold that has not been lifted was a democracy restriction that required the secretary of state to certify to congress that Egypt was taking steps towards full democracy, including by holding parliamentary elections.

On June 2, however, the US congress moved a step closer to fully returning to the status quo aid relationship, with a House subcommittee introducing a draft of the 2016 foreign aid budget, worth $1.5bn overall (including military and non-military aid), which is free of any such reform conditions.

The new bill would only require that the administration certifies that Cairo is sustaining its strategic relationship with the US and abiding by its peace treaty with Israel. It would also require the secretary of state to issue a classified report every 90 days that Egypt is taking steps to protect human rights and hold elections, but there are no conditions tied to this.

However, the draft budget is currently only the subcommittee version and has yet to go through the full foreign relations committee. There will also be a version submitted over the summer by the Senate, where there are a number of powerful critics of Egypt. As a result, a final congressional vote on the budget is unlikely to happen before December.

Perhaps in a concession to critics of Egypt in congress and the administration, the bill allows for $150 million of the total aid budget to go to non-governmental groups and democracy programmes in the form of economic support funds, and that Cairo would only receive money for budget support if the administration certifies it is stabilising its economy and implementing “market-based economic reforms”.

“Egypt is critical to the stability of the Middle East. I respect that president Sisi has called on religious leaders to reject radical terrorism, and Egypt must continue to build a strong diverse democracy. And we must continue to help them create jobs and grow their economy,” Dutch Ruppersberger, a Democrat on the foreign aid subcommittee, said in a statement to The National. “That said, we need to ensure we protect our other ally, Israel, and work through some of the outstanding issues regarding foreign aid restrictions.”

Some in the new Republican-dominated congress, in both parties, especially the House, have been vocally supportive of Mr El Sisi and a number of delegations have visited Cairo for talks with the Egyptian president.

“The security issue is what made people in congress who otherwise would not have cared much to get on board with the idea that this is not the time for us to put on any types of restrictions” on aid, said Mokhtar Awad, an analyst of US-Egypt relations at the Center for American Progress think tank in Washington.

At times, the US administration has had a contradictory stance on Egypt, but analysts doubted whether it would push for the restrictions to be reinserted.

“There are people in the administration who are very frustrated with the actions of the Egyptian government,” said Stephen McInerney, executive director of the Project on Middle East Democracy in Washington. In its last report explaining its refusal to grant a democracy certification to Egypt, the US state department was scathing in its assessment of the El Sisi government.

But the public disapproval has been muted, and the tone become more positive, though Egypt policy as a whole is not near the top of the US’ list of priorities in the region.

“For the most part they (the Obama administration) don’t feel like the US has the ability to influence the behaviour of the Egyptian government and there is not much appetite to take any real tough stands,” Mr McInerney added.

When Mr Obama announced his intention to fully resume military aid in late March, he also said that the nature of the aid would shift away from big-ticket items and weapons that the Egyptians wanted, to things the US feels are best suited to address Egypt’s security challenges.

Aid would be channelled into a handful of categories, counterterrorism, counter-insurgency in Sinai, maritime security and border protection, Mr Obama said at the time. The credit system that allowed Egypt to buy what they wanted long in advance of receiving aid would also be abolished, giving the US yet more control.

So far, Mr Awad said, there have been few concrete steps towards this recalibration and clarity on what the administration wants from Egypt in return for the full resumption of aid. There are real concerns in the administration about Egypt’s strategy for dealing with extremism, but the US has not made clear how it will tie its aid to a more effective strategy by Cairo.

“At a policy level the administration needs to be able to clearly articulate and tie its [aid] commitments to security deliverables from Cairo,” Mr Awad said. “Without that they won’t bring many dividends to the US.”

tkhan@thenational.ae