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EU: Guarantees of Egypt freedoms key to recovery

  • Mursi speaks as van Rompuy looks on during a press conference at the Presidential Palace in Cairo.

CAIRO: The EU president has told Egypt’s Islamist president that guarantees of freedoms of expression and religions are essential for attracting foreign investors and tourists. Herman van Rompuy added that genuine democracy can be achieved only through consensus and inclusiveness. He spoke after meeting Egyptian President Mohammad Mursi, who is facing an economic crisis brought on by two years of political turmoil.

Mursi is the first freely elected president, but the six months he has been in office have been defined by what his liberal and secular critics see as attempts by his fundamentalist Brotherhood to monopolize power and the hurried adoption of a constitution drafted by his Islamist allies and adopted by nearly 64 percent of the voters in a referendum, with a turnout of just 32 percent.

Rompuy earlier said that the European Union and other financial institutions had offered Egypt over 5 billion euros to support Egypt’s democratic transition.

“The European Union and associated financial institutions have offered an amount of more than 5 billion euros, or more than $6.5 bln, in grants, concessional loans and loans for a period of 2012 and 2013 to support Egypt’s democratic transition,” Rompuy said.

Egypt’s prime minister said he hopes to resume talks with the International Monetary Fund on a crucial $4.8 billion loan soon as it struggles to prop up an ailing economy wrecked by protracted political unrest.

Egypt’s loan agreement was approved in principle in November, but subsequent turmoil forced the government to delay a series of bitter austerity measures deemed necessary to win the IMF board’s final approval.

Addressing a business forum in Cairo, Prime Minister Hisham Kandil said government had agreed a “home-grown fiscal and financial program” as part of the deal.

“Because of the domestic situation we had to postpone that, so we are doing a quick evaluation. We are going to be back on track very soon,” he said.

“We invited another mission of the IMF to again realign the program so we can move forward with our national reform program to handle the budget deficit, to handle the fiscal problems so we can move forward with growth.”

Political unrest and protests in late November and early December set off a rush to convert Egyptian pounds to dollars, sending the currency to record lows on fears of a messy devaluation.

Officials said earlier an IMF team was expected to visit Cairo in two to three weeks. Egypt’s newly named central bank chief said last week there was no need to be worried about the situation.

“We are committed to reform. We are committed to deal with the budget deficit,” Kandil said.

He added Egypt planned to hold an international economic forum in coming months to feature investment plans and would also hold business roadshows to attract investors.

 
A version of this article appeared in the print edition of The Daily Star on January 14, 2013, on page 5.
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