Mon, Mar 04, 2013 - Page 1 News List

Egypt has to fix economy, strike IMF deal: Kerry

Reuters, CAIRO

US Secretary of State John Kerry said on Saturday it was vital that Egypt revive its economy and that the country’s fractious political parties reach agreement on painful economic reforms to secure an IMF loan.

The country’s foreign currency reserves have dived to little more than a third of levels before the 2011 revolution and the budget deficit is soaring as a sliding Egyptian pound pushes up the cost of state subsidies for imported fuel and food.

“It is paramount, essential, urgent that the Egyptian economy gets stronger, that it gets back on its feet,” Kerry told Egyptian and US business executives in Cairo. “It’s clear to us that the IMF arrangement needs to be reached.”

The Islamist government of Egyptian President Mohamed Morsi said on Thursday it would invite an IMF team to reopen talks on a US$4.8 billion loan that was agreed in November last year, but put on hold at Cairo’s request during street violence the following month.

Two years after the overthrow of former Egyptian president Hosni Mubarak, the most populous Arab nation is deeply divided, with many opposition parties promising to boycott parliamentary elections due to be held in four stages between next month and June.

With an IMF deal likely to involve painful measures, Kerry called for consensus on tackling the problems.

“We do believe that in this moment of serious economic challenge that it’s important for the Egyptian people to come together around the economic choices and to find some common ground,” he said after meeting Egyptian Foreign Minister Mohammed Kamel Amr.

Washington wanted to support democracy in Egypt, Kerry said, but was not seeking to favor any one party over another in what has become a deeply polarized society. He appeared to try to combat the belief among some Egyptians that the US has in effect sided with the Muslim Brotherhood.

A group of anti-Morsi demonstrators set fire to pictures of Kerry outside the Egyptian Foreign Ministry, the state MENA news agency reported, before Kerry arrived to meet Amr.

Earlier, the demonstrators had marched from Tahrir Square, the center of the 2011 uprising.

Some held up cartoons of Kerry, portraying him with an Islamic beard, saying “Kerry — member of the Brotherhood.”

Others banners said: “Kerry, you are not welcome here” and showed the characteristic mustache and fringe of Adolf Hitler superimposed on pictures of Morsi.

The protest was peaceful. However, youths fought interior ministry police on Saturday in the Nile Delta city of Mansoura, where one protester was killed and dozens injured. In the Suez Canal city of Port Said, protesters torched a police station, security sources said.

In other developments, an Egyptian court yesterday set the date for a retrial of Mubarak, his sons and top aides, ordering the politically fraught hearings over the killing of protesters to start just nine days before parliamentary elections next month.

The retrial could raise tensions at a time of political and economic turmoil in Egypt, which has seen waves of street unrest throughout the two years since Mubarak stepped down.

Morsi accuses his supporters of fomenting some of the unrest.

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