CAIRO: Egypt’s army chief called for talks on national unity to end the country’s mounting political crisis after a vital loan from the IMF was delayed and thousands of pro- and anti-government demonstrators took to the streets.
The meeting scheduled for yesterday afternoon was called in response to an increasingly destabilising series of protests that has unfolded since President Mohammed Mursi awarded himself sweeping powers on November 22 to push through a new constitution shaped by his Islamist allies in a referendum on Saturday.
Armed forces chief and Defence Minister Abdel Fattah Al Sisi called for a meeting of “national unity for the love of Egypt to bring together partners of the country in the presence of the president of the republic”, the army spokesman said.
An aide said Mursi had supported the call for talks. The Muslim Brotherhood said it would be there, while the main opposition coalition said it would decide today morning whether to attend.
Earlier, the finance minister disclosed that a $4.8bn International Monetary Fund loan, a cornerstone of Egypt’s economic recovery hopes, would be delayed until next month.
Mumtaz Al Said said the delay was intended to allow time to explain a widely criticised package of economic austerity measures to the Egyptian people.
The announcement came after Mursi on Monday backed down on planned tax rises, seen as essential for the loan to go ahead, but which the opposition had fiercely criticised.
“Of course the delay will have some economic impact, but we are discussing necessary measures (to address that) during the coming period,” Said told Reuters, adding: “I am optimistic ... everything will be well, God willing.”
Prime Minister Hisham Kandil said the measures would not hurt the poor. Bread, sugar and rice would not be touched, but cigarettes and cooking oil would go up and fines would be imposed for public littering. In a bid to rebuild consensus, he said there would be a public consultation about the programme next week.
On the streets of the capital, tensions ran high after nine people were hurt when gunmen fired at protesters camping in Tahrir Square, according to witnesses and Egyptian media.
The opposition has called for major protests it hopes will force Mursi to postpone the referendum. Thousands gathered outside the presidential palace, whose walls are scrawled with anti-Mursi graffiti.
A bigger crowd of flag-waving Islamist Mursi backers, who want the vote to go ahead as planned on Saturday, assembled at a nearby mosque, setting the stage for further street confrontations in a crisis that has divided the nation of 83 million.
In Egypt’s second city of Alexandria, thousands of rival demonstrators gathered at separate venues. Mursi’s backers chanted: “The people want implementation of Islamic law,” while his opponents shouted: “The people want to bring down the regime.” Others cities also witnessed protests.
The upheaval following the fall of Hosni Mubarak last year is causing concern in the West, in particular the United States, which has given Cairo billions of dollars in military and other aid since Egypt, the Arab world’s most populous nation, made peace with Israel in 1979.
The turmoil has also placed a big strain on the economy, sending foreign currency reserves down to about $15 billion, less than half what they were before the revolt two years ago as the government has sought to defend the pound.
“Given the current policy environment, it’s hardly a surprise that there’s been a delay, but it is imperative that the delay is brief,” said Simon Williams, HSBC economist in Dubai. “Egypt urgently needs that IMF accord, both for the funding it brings and the policy anchor it affords.” The IMF deal had been seen as giving a seal of approval to investors and donors about the government’s economic plans, vital for drawing more cash into the economy to ease a crushing budget deficit and stave off a balance of payments crisis.
In central Cairo, police cars surrounded Tahrir Square in central Cairo, the first time they had appeared in the area since shortly after Mursi awarded himself sweeping temporary powers in a move that touched off widespread protests.
The attackers, some masked, also threw petrol bombs that started a small fire, witnesses said. “The masked men came suddenly and attacked the protesters in Tahrir. The attack was meant to deter us and prevent us from protesting today,” said John Gerges, a Christian Egyptian who described himself as a socialist.
The latest bout of unrest has so far claimed seven lives in clashes between the Islamist Muslim Brotherhood and opponents who gathered outside Mursi’s presidential palace.
The Republican Guard, which protects the palace, has yet to use force to keep protesters away from the building, now ringed with tanks, barbed wire and concrete barricades.