Egyptian President Mohammed Mursi (centre) meeting with EU foreign policy chief Catherine Ashton in Cairo, yesterday.
CAIRO: The European Union’s foreign policy chief met Egyptian President Mohammed Mursi yesterday against a backdrop of sectarian violence to encourage feuding political leaders to seek a national consensus in tackling mounting problems.
“This is a critical time for Egypt’s transition. The country is facing huge economic and political challenges,” Catherine Ashton said before the talks.
Egypt is in the midst of long-delayed negotiations with the International Monetary Fund on a $4.8bn loan needed to cope with a growing economic crisis.
Foreign currency reserves have dwindled to less than three months’ imports, the Egyptian pound has lost nearly 10 percent against the dollar this year and there are warnings of power cuts and fuel shortages this summer.
“More than ever, Europe — as a partner and neighbour — has to support Egypt in its move towards deep and inclusive democracy. I will work hard in Cairo to engage with all parties to help build confidence and find common ground on both political and economic issues,” Ashton said.
She was due to meet six main opposition leaders later but EU diplomats said the prospect of a dialogue between the Muslim Brotherhood-led government and its liberal and leftist opponents had dimmed after recent political violence.
The opposition accuses Mursi of seeking to monopolise power and muzzle independent media and civil society using the public prosecutor, the security forces and a controversial draft law to regulate non-government organisations.
Mursi’s supporters say the opposition is trying to undermine his legitimacy and encouraging violence by refusing dialogue, threatening to boycott parliamentary elections and broadcasting hostile propaganda.
The US, which gives Egypt about $1.5bn in annual aid, directed its sharpest criticism so far at the Islamist-led authorities last week, citing a “disturbing trend of growing restrictions on freedom of expression”.
The European Parliament, in a non-binding resolution, urged the EU in March “not to grant any budgetary support to the Egyptian authorities if no major progress is made regarding respect for human rights and freedoms, democratic governance and the rule of law”.
The resolution particularly criticised the treatment of Copts and women.
EU officials have said that if Egypt reaches a deal with the IMF, it can expect an additional $500m in financial support from the EU and a similar amount from the US.
Meanwhile, Egypt is seeking to increase its previously-requested $4.8bn loan from the International Monetary Fund to cover its soaring budget deficit, the planning minister said in comments carried by three newspapers yesterday.
“Egypt will intensify its efforts in the spring meetings of the IMF in the period from April 16-21 to receive additional funding to cover the financing deficit until mid-2015,” Ashraf El Araby said in remarks carried by Al Masry Al Youm newspaper.
“There are ongoing discussions to increase the loan, estimated at $4.8bn but it may rise, especially with the increase in the budget deficit to $20bn,” he was quoted as saying. He gave no new figure and said the talks were not easy.
The minister told Al Mal financial daily that if a deal is not reached before May, talks will be postponed until October when parliamentary elections are expected to start.
It was the first time a minister had confirmed that the government was seeking to increase the size of the loan. Finance Minister Al Mursi Al Sayed Hegazy was quoted on April 2 as denying that Cairo had requested any change after a senior IMF official said the amount could be raised if Egypt needed. Asked whether the loan would be increased to $5.5bn, Araby was quoted in Al Shorouk daily as saying that figure was wrong without giving details, and any increase would depend on the expected rise in the budget deficit. Reuters
