Conflicting reports regarding the potential suspension of the $4.8 million loan, vouchsafed to Egypt by the International Monetary Fund (IMF), have been circulating over the last couple of days.
“The latest developments could bring into question the stability of state institutions and raise doubts that could delay the loan,” stated an anonymous IMF official to Ahram Online.
The Minister of Planning and International Cooperation, Ashraf El-Araby said in a press conference that the political circumstances are still dominating the economic scene “we spend most of our time trying to solve serious political issues and we hope for the accomplishment of the political structure as soon as possible, because it impacts the economic stability.”
The minister reported the declarations of the IMF representative for the Middle East, Abdel Ghafour Shaalan, who said “political factors will not have any effect on the preliminary agreement that was signed lately,” he added “the IMF board will convene on 12 December and is expected to issue a definitive approval on lending the government $4.8 million.” On the opposition to the economic reform plan that was put forward by the cabinet in the framework of the negotiations with the IMF, El-Araby said that if the IMF board didn’t give a green light to the loan, the government will be obliged to adopt a “more severe” plan.
The president’s economic advisor and the head of the Freedom and Justice Party’s economic committee, Abdallah Shehata, said the news about the deal suspension is not credible and without factual merit, saying that only Andreas Bauer, the IMF division chief in the Middle East and Central Asia, is entitled to give statements related to the loan. About the impact that the political events could have on the deal, Shehata said this was excluded “look at what happens in Greece, the situation is exploding there, yet this don’t affect foreign aids.”
Bauer said in a press release following the conclusion of the negotiations between the IMF team and the Egyptian government: “broad-based domestic and international support will be crucial for the successful implementation of the planned policies.”
Egyptian President Mohamed Morsy issued a constitutional declaration last Thursday that caused controversy and lead to violent clashes in the streets.