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The IMF is wrong about Egypt | ArabNews

The IMF is wrong about Egypt | ArabNews | Égypt-actus | Scoop.it

There are those that will feel that with Egypt, the International Monetary Fund is back up to its old, discredited trick of imposing, as a condition of a loan, ruinous terms that seem custom-made to produce economic hardship among those who can least afford it and as a consequence, political unrest.

It now looks as if the IMF will withhold a crucial $ 4.8 billion loan to Egypt, because it deems President Muhammad Mursi’s initial plans to put Egypt’s financial house in order, with tentative tax and price rises, as being insufficient to justify its support.

Without the loan, the financial prospects for the country look grim. Continuing political unrest, economic stagnation and a collapse in all-important tourism revenues mean that Cairo’s foreign exchange reserves are dwindling fast. Now standing at $ 13.5 billion, they represent less than three months import cover.

 

Without the IMF’s $ 4.8 billion, a further $ 9.5 billion of finance from other providers, will not be released. The money men in Washington are not happy with the Mursi plan to reduce Egypt’s deficit from almost 11 percent of gross domestic product to nearer 9.5 percent next year. They want a far more rapid reorientation of the country’s finances, including the sharp reduction in subsidies on fuel and food, which current consume more than a fifth of the state budget.

 

A source close to the apparently increasingly bad-tempered negotiations between the government and the IMF, has said that the Washington bankers are insisting that the markets be sent a clear signal, so that “confidence” can be restored.

Banks around the world may need confidence that they can work with Egyptian counter-parties, though with commercial risks already high, they will be charging fat fees for whatever funds they do choose to advance. But in talking about confidence, the IMF misses the wider point. Making Egypt jump through unrealistically difficult financial hoops, in return for its loans, is going to be hugely damaging to political and social stability. Until Egypt can find political equilibrium, there is little or no chance of any restoration of its economic fortunes.

Without a pickup in business activity and tourism, there will be precious few good Egyptian risks for the international markets to embrace. Therefore by withholding its loan, the IMF is in fact guaranteeing that Cairo’s finances and political stability will be further undermined, the very thing that it is supposed to be avoiding.

Twenty years ago, the organization built itself a dismal record in Africa. Its gray-suited officials pedaled the same harsh solution of slashing government budgets, increasing social tension and leaving the weakest to fend for themselves or survive on bilateral aid, in return for loans which themselves, very often carried tough terms. The predictable result was often default and re-financings (...)

 

More on: http://arabnews.com/editorial/imf-wrong-about-egypt

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Top IMF official to visit Egypt on Sunday for talks on economy

Top IMF official to visit Egypt on Sunday for talks on economy | Égypt-actus | Scoop.it

(Reuters) - A senior official from the International Monetary Fund will visit Cairo starting on Sunday for talks with the authorities on a revised economic program and next steps in the IMF's engagement with the country.

IMF spokesman William Murray said the fund's Director for the Middle East and North Africa Masood Ahmed will visit Cairo, the first visit by a top IMF official since Egypt suspended talks on a $4.8 billion IMF loan in December.

Egypt has said it is studying an offer of a bridging loan from the IMF, which would give the authorities access to rapid credit while it negotiates a full-fledged IMF program.

Murray would not elaborate on the upcoming discussions, saying only that "the IMF remains fully committed to supporting Egypt at this critical time."

  http://www.reuters.com/article/2013/03/14/imf-egypt-idUSL1N0C64AS20130314
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L'Egypte refuse une aide de 750 millions de dollars du FMI

L'Egypte refuse une aide de 750 millions de dollars du FMI | Égypt-actus | Scoop.it

Le ministre des Finances égyptien Al-Morsi Hegazy a indiqué mardi dans un communiqué de presse que l'Egypte a refusé un prêt urgent de 750 millions de dollars du Fonds monétaire international.

 

Le ministre a dit que le gouvernement a pris la décision sur des préoccupations qu'un tel prêt urgent pourrait apporter des risques sur l'économie nationale, ajoutant que l'économie égyptienne est sur la voie du redressement et de la stabilité.

M. Hegazy a également déclaré que le gouvernement égyptien a complété la préparation d'un programme de réforme économique et sociale, soulignant que l'Egypte, en tant que membre du FMI a le droit d'obtenir un prêt équivalant à 300% de sa quote-part dans le fonds, ce qui représente environ 4,8 milliards de dollars américains.

L'Egypte est actuellement en train de se battre pour obtenir un prêt de sauvetage de 4,8 milliards de dollars du FMI pour surmonter une grave crise financière créée par deux années de troubles et d'instabilité après la révolution de 2011 a ont renversé l'ancien président Hosni Moubarak.

Le cabinet égyptien dirigé par le Premier ministre Qandil Hesham tente de frapper toutes les portes afin de soulager l'économie chancelante car le déficit budgétaire devrait atteindre 26,74 milliards de dollars durant l'exercice budgétaire 2012-2013.

 

 

http://www.afriquinfos.com/articles/2013/3/12/legypte-refuse-aide-millions-dollars-219007.asp

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Minister: IMF loan not affected by election delay

Minister: IMF loan not affected by election delay | Égypt-actus | Scoop.it

A US$4 billion loan Egypt seeks from the International Monetary Fund will not be affected by the delay of parliamentary elections previously scheduled for April, according to Minister of Planning and International Cooperation, Ashraf al-Araby.

The Cairo Administrative Court delayed polls for the House of Representatives indefinitely last week, saying that the Shura Council needed to make amendments to the election law and then have them reviewed by the Supreme Constitutional Court.

Egypt and the IMF had signed an initial agreement for the loan in November, but negotiations over the deal have been delayed by domestic political instability.

The IMF had not made any negative remarks over the government’s 22-month economic reform program, upon which the IMF loan is conditioned, the minister told state-run news agency MENA. He added that the IMF had indicated an initially positive response to the plan.

Egypt has officially invited the IMF for another visit within the next few days to further discussion over the program, Araby said.

Araby also emphasized that though Egypt is keen on resuming negotiations for the loan, the country is in no need for an urgent loan, adding that closing the budget deficit requires vast structural measures rather than borrowing.

The IMF had said Monday that Egypt can acquire an urgent financial support from the fund while negotiating for the loan, but Egypt turned down the offer.

IMF spokesperson Wafaa Amr had said that the fund was mulling changes to its economic expectations for the Egyptian Government, while also saying that no date had been set for the IMF’s visit to Egypt.

Edited translation from MENA (Egypt independent)

http://www.egyptindependent.com/news/minister-imf-loan-not-affected-election-delay

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Un prêt d'urgence à l'Egypte peut être une "option" provisoire

Le FMI  a estimé qu'un prêt d'urgence à l'Egypte pourrait être une "option" en attendant que les discussions sur un plan d'aide plus ambitieux aboutissent avec les autorités, a indiqué lundi à l'AFP une porte-parole de l'institution.
Ce prêt d'urgence, qui prendrait la forme d'un Instrument de financement rapide (IFR), "peut être une option si un besoin de financement apparaît en attendant qu'un programme solide sur le moyen terme soit mis en place", a déclaré cette porte-parole dans un courrier électronique.
L'IFR offre aux Etats-membres du FMI confrontés à des besoins de financement urgents une aide rapide mais limitée, sans qu'il soit nécessaire de mettre en place un programme à part entière.
"Au final, c'est aux autorités de prendre une décision" et d'en faire la demande au FMI, a-t-elle toutefois précisé.
Un pré-accord avait été conclu en novembre entre le FMI et l'Egypte pour un prêt de 4,8 milliards de dollars mais les autorités avaient suspendu le processus en décembre en raison de l'instabilité politique dans le pays.
Les discussions ont, depuis, repris autour d'un nouveau plan de réformes et possiblement d'un nouveau montant.
"Nous sommes actuellement en train d'examiner le programme économique proposé par les autorités et leurs projections macro-économiques et nous discutons avec eux des prochaines étapes de notre engagement", a ajouté la porte-parole, réaffirmant la volonté du Fonds d'aider le pays dans "cette période cruciale".
L'Egypte a besoin de se réformer "sans attendre davantage", a-t-elle souligné.
Deux ans après la chute du régime autoritaire de Hosni Moubarak, renversé par une révolte populaire, les troubles politiques continuent de secouer le pays.
Ces derniers mois, des violences parfois meurtrières ont éclaté dans le pays, souvent en marge de manifestations contre le président Mohamed Morsi, élu en juin et accusé d'avoir "trahi la révolution" et de ne pas parvenir à faire face aux problèmes économiques.

(Les Echos)

http://www.lesechos.fr/entreprises-secteurs/finance-marches/actu/afp-00506069-un-pret-d-urgence-a-l-egypte-peut-etre-une-option-provisoire-545965.php


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Egypt hits problems over IMF loan

Egypt hits problems over IMF loan | Égypt-actus | Scoop.it
Egypt's efforts to secure a critical $4.8bn loan from the International Monetary Fund have run into fresh difficulty, possibly leading the government to seek emergency financing to avoid economic collapse.


The IMF has expressed reservations over a government economic plan needed to seal an agreement that has been in the works, for almost two years, according to people familiar with the negotiations. (...)

 

The IMF, however, has informed Cairo that its proposed economic reform programme is not sufficiently robust.

 

Masood Ahmed, director of the Middle East and Central Asia at the IMF, would not comment on the negotiations with Cairo, saying only that "the IMF view is that the programme has to have the desired impact on confidence ... [and] needs to have strong measures to address Egypt's broader economic problems".

 

With the prospect of an IMF agreement receding, analysts say a bridge finance package might be put together by the IMF with other donors to tide Cairo over until after the elections.Ashraf al-Araby, the planning minister, played down the idea on Sunday, adding that broad structural measures were needed.

 

Without a reform programme, bridging financing would in any case do little to restore investor confidence. "Any extra funds will help Egypt buy time," said Mohamed Abu Basha, Egypt economist at EFG-Hermes, the regional investment bank. "But the failure to agree an IMF programme will send a negative signal to all those investors waiting for hints of real action on the ground to reform the economy."

 

More on: http://edition.cnn.com/2013/03/11/business/egypt-imf-loan/

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Egypt Not in Talks With IMF for Emergency Loan, Minister Says

Egypt Not in Talks With IMF for Emergency Loan, Minister Says | Égypt-actus | Scoop.it

Egypt is “not in need” of an emergency loan from the International Monetary Fund and is instead focusing its efforts on completing a $4.8 billion loan agreement with the lender, the country’s planning minister said.

“Egypt wants to implement the fiscal and economic reform program as we have a number of structural problems,” Planning and International Cooperation Minister Ashraf el-Arab said in Cairo today.

The political tensions plaguing the country since the 2011 uprising have prolonged Egypt’s loan talks with the fund. International reserves have plunged more than 60 percent from their pre-revolt levels. Egyptian officials have said the IMF loan is necessary to bolster investor confidence and unlock other funds.

Earlier today, Investment Minister Osama Saleh said in an interview that the government was in contact with the IMF to answer questions the fund has about the economic plan submitted as part of the loan request.

Egypt’s annual urban inflation rate accelerated last month to 8.2 percent, the highest reading since May 2012, amid a weakening currency, the statistics agency said today.

News website Aswat Masriya reported earlier this month that Egypt may study an IMF offer to provide an urgent loan of as much as $750 million. Aswat Masriya cited an unidentified Finance Ministry official.

 

http://www.bloomberg.com/news/2013-03-10/egypt-not-in-talks-with-imf-for-emergency-loan-minister-says.html

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Analysis: Egypt is in for trouble with or without the IMF

Analysis: Egypt is in for trouble with or without the IMF | Égypt-actus | Scoop.it

Egypt is at risk of a "revolution of the hungry" two years after Hosni Mubarak was ousted in a popular uprising, as food and energy prices will soar with or without an IMF deal.

Failure to get the $4.8 billion loan or some other funding would have dire consequences: if Egypt keeps burning foreign currency at the rate it has done since the 2011 uprising, it will have none left in little more than a year.

But success would also stir Egypt's boiling social and political cauldron. In return for a lifeline, the International Monetary Fund will demand reform of a subsidy system that long ago became unaffordable.

The rich benefit most from the energy subsidies that exhaust state finances but the poor will suffer most if they go.

"Whether we have the IMF or not there will be difficulty ... the IMF requires certain economic reforms," said Salah Gouda, an economics professor. "If we lift subsidies right away then you are looking at a revolution of the hungry."

The economic gloom has dragged Egyptians from the high of the "Arab Spring" revolution to deepening poverty.

Constant feuding between the ruling Islamists of President Mohamed Mursi and the opposition over the future character of Egypt has heightened tensions and cast serious doubt on any hopes for a political consensus on reforming the economy.

The United States, the largest shareholder in the IMF, is worried about how the economic crisis could further destabilize a strategic ally in a turbulent region.

"It is paramount, essential, urgent that the Egyptian economy gets stronger, that it gets back on its feet," Secretary of State John Kerry said on a weekend visit to Cairo. "It's clear to us that the IMF arrangement needs to be reached, that we need to give the market that confidence."

 

More on:http://www.reuters.com/article/2013/03/05/us-egypt-imf-idUSBRE9240GT20130305

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Egypte: un accord avec le FMI pourrait être trouvé avant les législatives

Le ministre égyptien des Finances, El-Morsi El-Sayed Hegazy, a affirmé dimanche que son gouvernement pourrait s'entendre avant les élections législatives d'avril avec le Fonds monétaire international (FMI ) pour un prêt de 4,8 milliards de dollars, selon l'agence officielle Mena.
L'Egypte négocie depuis des mois un accord sur ce prêt crucial pour son économie, mais les troubles politiques, qui empêchent le président Mohamed Morsi de mener à bien des réformes économiques susceptibles de provoquer de nouvelles explosions de colère dans les rues, retardent les discussions.
M. Hegazy a déclaré s'attendre à ce que l'accord avec le FMI "intervienne avant le début des élections législatives", qui doivent commencer le 22 avril et s'étaler sur trois mois, a rapporté la Mena.
Le ministre a cependant affirmé que ses services avaient préparé un plan économique qui allait être "appliqué, avec ou sans prêt".
Le prêt du FMI est jugé capital pour restaurer la confiance des investisseurs étrangers et des bailleurs de fonds internationaux dans l'économie du pays.
Lors de sa visite au Caire, le secrétaire d'Etat américain John Kerry avait souligné samedi l'importance du prêt du FMI, en partie conditionné par le consensus qu'il devrait susciter au sein d'une classe politique qui n'a jamais été autant divisée.
"Il est primordial, essentiel, urgent que l'économie égyptienne devienne plus forte, qu'elle se remette sur pieds", avait-il déclaré à des hommes d'affaires en présence de la presse. "Il est évident pour nous qu'il faut parvenir à un accord avec le FMI. Il faut pouvoir inspirer confiance aux marchés". (Les Echos)

http://www.lesechos.fr/economie-politique/monde/actu/afp-00504236-egypte-un-accord-avec-le-fmi-pourrait-etre-trouve-avant-les-legislatives-ministre-543647.php


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L'Egypte espère un accord avec le FMI avant les élections

Le ministre égyptien des Finances a dit espérer que le prêt dont le Fonds monétaire international a approuvé le principe en novembre puisse être accordé avant le début des élections législatives, prévu le 22 avril.


Le prêt d'un montant de 4,8 milliards de dollars avait été approuvé par le FMI fin 2012 mais son octroi avait été gelé en raison des violentes manifestations qui s'étaient déroulées en Egypte en décembre.

"Nous nous attendons à ce qu'un accord intervienne avant les élections", a commenté Al Moursi al Saied devant la presse. "J'espère et je m'attends à ce que l'accord intervienne avant les élections", a-t-il ajouté.

Plus:http://fr.reuters.com/article/frEuroRpt/idFRL6N0BV1X220130303

 

 

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Egypt to invite IMF team Thursday for loan talks-minister

Egypt will send an invitation to an IMF technical team on Thursday for negotiations on a $4.8 billion loan deal, the state newspaper al-Ahram quoted planning minister Ashraf al-Araby as saying.

Al-Araby said he expected the team to arrive within 10 days, the newspaper reported on its website. (...)

"Today, Thursday, a formal invitation will be sent to the technical delegation of the International Monetary Fund to come to Cairo to negotiate over the $4.8 billion loan to Egypt," al-Ahram quoted al-Araby, who is Planning and International Cooperation Minister, as saying.

 

The paper also quoted him as saying he expected the delegation to arrive to Cairo "within ten days".

 

More on:http://www.reuters.com/article/2013/02/28/egypt-imf-invitation-idUSL6N0BS5EZ20130228

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Egypt could introduce tax hikes and subsidy cuts to deal with deficit

Egypt could introduce tax hikes and subsidy cuts to deal with deficit | Égypt-actus | Scoop.it

In order to reduce Egypt's growing budget deficit, the government has proposed a package of reforms that includes raising taxes and cutting subsidies.

The reforms will be included in a modified economic programme that Egypt will present on Tuesday to the IMF, with the aim of meeting the pre-conditions for a proposed $4.8 billion loan to Egypt.

The proposed modifications should, according to Hani Qadri Demyan, assistant to Egypt's minister of finance, reduce expenditures by between LE10-12 billion ($.1.8 billion) in 2013/2014.

At a conference held at the ministry of finance on Tuesday, Demyan said that savings from the current fiscal period will not be very high, as the reforms will not be adopted before March or April.

 

The implementation of the proposed reforms will not start until they are approved by the Shura Council, which will start debating them within two days, according to Demyan.

 

The reforms approved by Egypt's cabinet are a milder version of a set of policies proposed by Morsi in December, which he then suspended amid growing popular anger. The cabinet has approved an increase in tax sales for six goods instead of the 25 proposed previously. The concerned goods are beverages, cigarettes, steel, cement and telecommunications.

 

The fiscal reforms also include an increase in the maximum revenue tax from 20 to 25 percent, as well as an increase in the minimum monthly salary eligible for income tax exemptions from LE9,000 to LE12,000 as of October 2013.

 

Another aspect of the government programme is a cut in energy subsidies, which are estimated to reach LE117 billion this fiscal year. (...)

 

The fate of other industries is not clear yet. The government, however, increased energy prices in April last year for energy-intensive industries from $4 to $6 per million British Thermal Units (BTU) and from $2.25 to $3 for medium energy-intensive industries.

 

More on: http://www.albawaba.com/business/egypt-economy-deficit-473781

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Top Fund Manager Sees Egypt Yields Shunning Unrest: Arab Credit

Top Fund Manager Sees Egypt Yields Shunning Unrest: Arab Credit | Égypt-actus | Scoop.it

Egypt’s borrowing costs are set to drop as the slowest loan growth three years amid escalating political turmoil prompts banks to park funds in government notes, the Middle East’s top money markets fund manager said.

“Banks have nowhere else to put their money,” Khalil El Bawab, director of fixed income at Cairo-based EFG-Hermes Holding, said by phone on Feb. 19. “Although there’s a lack of visibility on where the country is going, the market’s risk appetite has been adjusted due to the persistence of instability in the last two years.”(...)

Local banks have bought most government debt since the ouster of President Hosni Mubarak two years ago led foreign investors to exit their holdings and political turmoil muted loan demand. (...) Egyptian companies remained about two thirds below peers in the Middle East and Africa, according to data compiled by Bloomberg.

 

Spurring Profit

Commercial International Bank Egypt SAE, the country’s biggest publicly traded lender, posted loan growth of 2.6 percent last year, the slowest pace since 2002. (...) . The Islamist government, led by President Mohamed Mursi, has put off talks [with IMF] since an initial deal was signed in November as it struggles to build consensus needed to implement reforms including tax increases.

 

IMF Agreement

(...) Mursi’s critics say the president, who became the country’s first democratically elected civilian leader in June, has sought to advance the interests of the Muslim Brotherhood while failing to revive the economy or address social needs (...)

“The government is hoping yields will remain relatively low while the political dispute moves toward a resolution and an IMF deal is signed,” said El Bawab, whose fund has returned 11.3 percent over the past year. “So far it has worked. But if we don’t see positive developments in the next month, that will all change.”(...)

 

Political ‘Deterioration’

The most recent bout of violence that started Jan. 25 has driven the yield on the government’s $1 billion of 5.75 percent dollar bonds due in April 2020 up 150 basis points, or 1.5 percentage points, to 7.06 percent yesterday.

The cost of protecting Egypt’s debt against default for five years has soared 164 basis points in the same period to a seven-month high of 609 on Feb. 22 (...). Still, local-currency government borrowing costs haven’t followed dollar bond yields as banks struggle to revive lending (...)

 

 

Egypt-actus's insight:

Sooner or later, yields will go up on government debt because banks won’t like compressing their profit margins for long,” Moustafa Assal, managing director of Cairo-based Bondlink Advisory, which trades government debt, said by phone Feb. 21. “There are real doubts now on the ability of the government to secure an IMF agreement because of how the current political and economic crisis are being handled.”

 

More on: http://washpost.bloomberg.com/Story?docId=1376-MIGT0I6JTSE901-7OFVSI4N2E4UG5REC1MCHR55J3

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IMF mission due in Cairo Sunday to discuss economic reforms

IMF mission due in Cairo Sunday to discuss economic reforms | Égypt-actus | Scoop.it

An International Monetary Fund delegation is due to arrive in Cairo on Sunday to renew discussions regarding economic reforms, said IMF deputy spokesperson William Murray on Thursday.

The IMF is committed to supporting the reform program prepared by Prime Minister Hesham Qandil that is intended to address economic, financial and social challenges, Murray asserted.

Last November Egypt signed an initial agreement with the IMF for a US$4.8 billion loan, but since then negotiations have been stymied in the midst of ongoing political instability.

Last year, Egypt drew up a 22-month long economic program that included the controversial removal of several subsidies in an attempt to curry favor with the IMF.
In February, the Cabinet amended the program at the fund’s request, aiming to strengthen the country's foreign reserves to reach US$19 billion by the end of June, and to US$22.5 billion in the 2013-2014 fiscal year.

Egypt needs the IMF loan and funds from other international donors to bridge a budget deficit that could reach LE180 billion this fiscal year. However, the state recently rejected the IMF’s offer for an emergency US$750 million loan.

Edited translation from MENA (Egypt independent)

http://www.egyptindependent.com/news/imf-mission-due-cairo-sunday-discuss-economic-reforms

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Why is the IMF in a Hurry with Egypt?

Why is the IMF in a Hurry with Egypt? | Égypt-actus | Scoop.it

This could be one of the few occasions when the IMF actively seeks to pressure a member state into taking out an urgent loan. The idea is that the funds would serve as a timely bridge until the county’s condition stabilizes, at which point both sides can negotiate a proper reform program in exchange for a substantial package of aid.

 

It seems that the IMF, which announced its offer to Egypt this week and expressed its readiness to provide an urgent emergency loan amounting to USD 750 million, senses the danger the Egyptian economy will soon be facing, after its foreign exchange reserves decreased to less than one third of their 2011 levels.

Deficits in the balance of payments and the budget have also increased, and recent figures have indicated high inflation rates. This is not the first time that the IMF has expressed its willingness to negotiate and sign an agreement offering incentives to Egypt, but all too often domestic politics and tensions have interfered, rendering any agreement meaningless.

The IMF’s fears are justified. Egypt’s economic situation is perilous, as evidenced by its meager energy supplies in certain sectors, and its lack of foreign exchange necessary for imports. Yet the real problem lies in the fact that carrying out an economic reform program requires a state of stability and a minimum degree of social and political harmony in the first place. Unfortunately, this does not exist in the Egyptian political arena at present, given the widespread disagreements between various political currents and powers.

Concluding an agreement with the IMF is never easy, even at times of political stability. This is because the incentives offered—effectively a means for international investors and donors to gain trust as a prerequisite for further aid—are often tied to economic reform programs. These are usually unpopular with citizens, because they often involve cost-cutting measures and privatization. In many cases, economic reform also necessitates currency flotation, whereby the currency is devalued in order to make exports more competitive. At the same time, this causes local prices to soar because import costs rise automatically.

Egypt’s current problem is that there is no time to wait; the economy is declining rapidly to the extent that some expect it will only be two or three months before it reaches a critical point. However, no one seems able to put a stop to this decline because of the growing political crisis that now threatens the state itself, with the incomprehensible subversion and unjustifiable violence taking place on the Egyptian street.

Any agreement concluded with the IMF requires either a strong government or one that is formed by national consensus—not by disagreements and boycotts as is the case now—or through national unity, whereby every single group is represented. Such a government must lead the transitional period, revitalize institutions like the police force, and restore a degree of stability in both the political and security framework so that the economic wheel can begin turning once again.

(...)

 

More on:http://www.aawsat.net/2013/03/article55295734

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Egypt will not sign emergency IMF loan - cabinet

Egypt will not sign any "emergency" loan with the IMF, cabinet spokesman Alaa el-Hadidi said on Tuesday, appearing to rule out any recourse to a bridging loan which the IMF said on Monday was available to Cairo.

Hadidi added that any loan agreement would be within the framework of the country's economic programme.

Egypt is seeking a $4.8 billion loan from the International Monetary Fund to stave off a balance of payments crisis, but securing IMF aid would involve commiting to austerity measures that are likely to lead to unrest.

"There will not be a fast or emergency loan," Hadidi told reporters, adding that no timing had been set yet for an IMF mission to visit Egypt.

The IMF said in statements on Monday that Egypt had the option of using the Rapid Financing Instrument (....) and an Egyptian source at the finance ministry said Cairo was studying the offer.

 

"There is no agreement yet over the arrival of the mission and we are waiting for them," Hadidi said.

 

http://www.reuters.com/article/2013/03/12/egypt-imf-idUSL6N0C45RU20130312

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IMF expected to visit Egypt in coming days according to state media

IMF expected to visit Egypt in coming days according to state media | Égypt-actus | Scoop.it

A team from the International Monetary Fund is expected to visit Egypt in the next few days for negotiations over a $4.8 billion loan, state media quoted a minister as saying on Tuesday.

Egypt has been trying to secure the loan to bolster its finances, which deteriorated after a popular uprising two years ago overthrew President Hosni Mubarak and sunk the Arab country into political turmoil.

Cairo had agreed the loan in principle in November, but requested a delay in December after a wave of unrest. It has since sent the international lender a revised economic program.

Planning and International Cooperation Minister Ashrafal-Araby denied media reports the IMF had responded negatively to the revised plan.

“Egypt has extended an official invitation to the Fund to visit and view its economic reform program, discuss it and comment on it,” state news agency MENA quoted Araby as saying, adding the visit was expected “within the next few days.”

But on Monday the IMF said there was no date set yet for a visit to Cairo.

 

More on: http://english.alarabiya.net/en/business/2013/03/12/IMF-expected-to-visit-Egypt-in-coming-days-according-to-state-media.html

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Un prêt d'urgence à l'Egypte peut être une "option" provisoire

Un prêt d'urgence à l'Egypte peut être une "option" provisoire | Égypt-actus | Scoop.it

Le FMI a estimé qu'un prêt d'urgence à l'Egypte pourrait être une "option" en attendant que les discussions sur un plan d'aide plus ambitieux aboutissent avec les autorités, a indiqué lundi à l'AFP une porte-parole de l'institution.

Ce prêt d'urgence, qui prendrait la forme d'un Instrument de financement rapide (IFR), "peut être une option si un besoin de financement apparaît en attendant qu'un programme solide sur le moyen terme soit mis en place", a déclaré cette porte-parole dans un courrier électronique.

L'IFR offre aux Etats-membres du FMI confrontés à des besoins de financement urgents une aide rapide mais limitée, sans qu'il soit nécessaire de mettre en place un programme à part entière.

"Au final, c'est aux autorités de prendre une décision" et d'en faire la demande au FMI, a-t-elle toutefois précisé.

Un pré-accord avait été conclu en novembre entre le FMI et l'Egypte pour un prêt de 4,8 milliards de dollars mais les autorités avaient suspendu le processus en décembre en raison de l'instabilité politique dans le pays.

Les discussions ont, depuis, repris autour d'un nouveau plan de réformes et possiblement d'un nouveau montant.

"Nous sommes actuellement en train d'examiner le programme économique proposé par les autorités et leurs projections macro-économiques et nous discutons avec eux des prochaines étapes de notre engagement", a ajouté la porte-parole, réaffirmant la volonté du Fonds d'aider le pays dans "cette période cruciale".

L'Egypte a besoin de se réformer "sans attendre davantage", a-t-elle souligné.
Deux ans après la chute du régime autoritaire de Hosni Moubarak, renversé par une révolte populaire, les troubles politiques continuent de secouer le pays.

Ces derniers mois, des violences parfois meurtrières ont éclaté dans le pays, souvent en marge de manifestations contre le président Mohamed Morsi, élu en juin et accusé d'avoir "trahi la révolution" et de ne pas parvenir à faire face aux problèmes économiques.

http://www.lesechos.fr/entreprises-secteurs/finance-marches/actu/afp-00506069-un-pret-d-urgence-a-l-egypte-peut-etre-une-option-provisoire-545965.php

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IMF not satisfied with Egypt’s economic reform plans

IMF not satisfied with Egypt’s economic reform plans | Égypt-actus | Scoop.it

By: Nada Badawi : Daily news Egypt


An anonymous official from the Ministry of Finance revealed last Thursday that the International Monetary Fund (IMF) is “not satisfied with Egypt’s amended economic and social reform program submitted last week” , Al Youm 7’s website reported.

He said that the economic reform programme, which introduced a set of austerity measures such as tax hikes on a range of goods and services, is not sufficient to qualify Egypt for the proposed $4.8bn IMF loan.

The source said that the programme does not generate enough revenues or promote growth, which leaves Egypt’s budget deficit in further distress.

“The IMF’s comments should come as no surprise since the country is embroiled in ongoing political and social turmoil,” he said.

The official also highlighted lack of public and political support for the loan, which is a required condition from the IMF in order to approve the loan.

 

More : http://www.dailynewsegypt.com/2013/03/10/imf-not-satisfied-with-egypts-economic-reform-plans/

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L'Egypte prête à reprendre les discussions avec le FMI pour un prêt

 Le gouvernement égyptien a prévu de réduire son déficit budgétaire à l'équivalent de 11 % du PIB d'ici à la fin de l'année fiscale 2013-2014. Il voudrait par ailleurs reprendre les négociations pour obtenir un prêt de 4,8 milliards de dollars auprès du Fonds monétaire international. L'espoir est d'aboutir avant les élections parlementaires qui auront lieu le mois prochain. Hier, les incidents se sont poursuivis à Port- Saïd entre manifestants et forces de l'ordre pour le troisième jour de suite. (Les Echos)

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Egypte: un accord avec le FMI pourrait être trouvé avant les législatives (ministre)

Le ministre égyptien des Finances, El-Morsi El-Sayed Hegazy, a affirmé dimanche que son gouvernement pourrait s'entendre avant les élections législatives d'avril avec le Fonds monétaire international (FMI) pour un prêt de 4,8 milliards de dollars, selon l'agence officielle Mena.
L'Egypte négocie depuis des mois un accord sur ce prêt crucial pour son économie, mais les troubles politiques, qui empêchent le président Mohamed Morsi de mener à bien des réformes économiques susceptibles de provoquer de nouvelles explosions de colère dans les rues, retardent les discussions.
M. Hegazy a déclaré s'attendre à ce que l'accord avec le FMI "intervienne avant le début des élections législatives", qui doivent commencer le 22 avril et s'étaler sur trois mois, a rapporté la Mena.
Le ministre a cependant affirmé que ses services avaient préparé un plan économique qui allait être "appliqué, avec ou sans prêt".
Le prêt du FMI est jugé capital pour restaurer la confiance des investisseurs étrangers et des bailleurs de fonds internationaux dans l'économie du pays.
Lors de sa visite au Caire, le secrétaire d'Etat américain John Kerry avait souligné samedi l'importance du prêt du FMI, en partie conditionné par le consensus qu'il devrait susciter au sein d'une classe politique qui n'a jamais été autant divisée.
"Il est primordial, essentiel, urgent que l'économie égyptienne devienne plus forte, qu'elle se remette sur pieds", avait-il déclaré à des hommes d'affaires en présence de la presse. "Il est évident pour nous qu'il faut parvenir à un accord avec le FMI. Il faut pouvoir inspirer confiance aux marchés". (Les Echos)

http://www.lesechos.fr/economie-politique/monde/actu/afp-00504236-egypte-un-accord-avec-le-fmi-pourrait-etre-trouve-avant-les-legislatives-ministre-543647.php

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L'Egypte espère un accord avec le FMI avant les élections

(Reuters) - Le ministre égyptien des Finances a dit espérer que le prêt dont le Fonds monétaire international a approuvé le principe en novembre puisse être accordé avant le début des élections législatives, prévu le 22 avril.

Le prêt d'un montant de 4,8 milliards de dollars avait été approuvé par le FMI fin 2012 mais son octroi avait été gelé en raison des violentes manifestations qui s'étaient déroulées en Egypte en décembre.

"Nous nous attendons à ce qu'un accord intervienne avant les élections", a commenté Al Moursi al Saied devant la presse. "J'espère et je m'attends à ce que l'accord intervienne avant les élections", a-t-il ajouté.

Le processus électoral doit se dérouler en quatre étapes à compter du 22 avril jusqu'au mois de juin.

(Asma Alsharif; Pierre Sérisier pour le service français)

 

http://fr.reuters.com/article/frEuroRpt/idFRL6N0BV1X220130303

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Egypte: le secrétaire d'Etat américain veut pousser à un consensus

Egypte: le secrétaire d'Etat américain veut pousser à un consensus | Égypt-actus | Scoop.it

Le secrétaire d'Etat américain John Kerry était en visite au Caire samedi afin de pousser à un consensus entre pouvoir et opposition pour sortir l'Egypte de l'impasse politique et de la crise économique.

Alors que M. Kerry arrivait au Caire en provenance de Turquie, des manifestants ont mis le feu à un commissariat à Port Saïd (nord-est), une ville qui observe un mouvement de désobéissance civile pour la troisième semaine consécutive pour protester contre la politique du président Mohamed Morsi.

 

Le responsable américain, qui effectue sa première tournée internationale depuis sa prise de fonctions le 1er février, doit s'entretenir avec M. Morsi. Il a rencontré le chef de la Ligue arabe Nabil al-Arabi avant des discussions en soirée avec son homologue égyptien Mohammed Kamel Amr.

 

"Il travaille à établir des contacts avec le gouvernement, l'armée, et les personnes impliquées dans la nouvelle Egypte: les dirigeants politiques, les chefs d'ONG, les hommes d'affaires", selon un responsable du département d'Etat.(...)

 

Le secrétaire d'Etat "ne va pas leur dire ce qu'il faut faire", mais il soulignera le fait que "la seule manière de se faire entendre, c'est de participer aux élections", a indiqué aux journalistes le cadre du département d'Etat.

 

Un consensus politique faciliterait un accord avec le Fonds monétaire international (FMI) pour un prêt de 4,8 milliards de dollars, jugé capital pour restaurer la confiance dans l'économie égyptienne.

 

Des responsables égyptiens ont indiqué poursuivre les négociations avec le FMI concernant ce prêt, reporté en raison des troubles politiques et qui pourrait être signé une fois le nouveau Parlement en place, en juillet.

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TEXT-Fitch:Egypt vote timetable, boycott likely to delay IMF deal

TEXT-Fitch:Egypt vote timetable, boycott likely to delay IMF deal | Égypt-actus | Scoop.it

 

(The following statement was released by the rating agency)

 

Further delay to an agreement on an IMF programme resulting from the extended timetable for Egypt's parliamentary elections and boycott plans by the main secular opposition grouping would heighten risks to the country's fiscal and external financing positions, Fitch Ratings says.

 

We had expected a new deal to be agreed in Q213. But voting is now set to continue until late June, shortly before the start of Ramadan and the summer holiday season. This need not hold up negotiations, but finalising a programme would probably be more straightforward after contested elections that produced a government with a clear mandate to conclude a deal. So a deal might now be delayed until well into Q313 and may prove tougher to sell to the Egyptian people.

 

An IMF deal is vital for a sustained improvement in the balance of payments, and to prevent uncontrolled currency depreciation. A sustained period without IMF support could result in tighter capital controls and a sharper fall in the pound. The need for an IMF deal is becoming more pressing in the absence of further pledges of bilateral support beyond a reported agreement by Qatar to buy USD2.5bn of Egyptian T-bonds in March.

 

More on: http://www.reuters.com/article/2013/02/27/idUSWLA0074Y20130227

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Egypt's Options Narrow To IMF, Qatar As Money Runs Out

Egypt's Options Narrow To IMF, Qatar As Money Runs Out | Égypt-actus | Scoop.it

Egypt seems to realise the money has nearly run out and it must turn to the IMF or a willing friend in the Gulf, where it now has just one, Qatar.

After months of delays, the Islamist government has produced a new plan to reverse a slide in its foreign currency reserves and tackle a budget deficit that could overwhelm a stable wealthy nation, let alone a country riven by political conflict.

This plan relies on someone else stumping up to keep the Arab world's most populous nation afloat. Any hope that the government can hold out until after parliamentary elections due to finish in June and delay highly unpopular cuts seems slim, with signs of extreme economic stress all around.

That narrows Cairo's immediate options to the International Monetary Fund, which will demand the kind of austerity measures that could provoke yet more street violence in the middle of an election campaign.

 

The other option is Qatar, the only wealthy Gulf nation truly sympathetic to the Muslim Brotherhood government. Doha has already provided help but in amounts that have failed to prevent Egypt's currency reserves from falling worryingly low.

"The authorities have little margin of manoeuvre left without fresh capital flows into the Egyptian economy," said Alia Moubayed, an economist at Barclays.

 

Above all, economists believe, Egypt needs a political consensus on reforms to stabilise its finances. However, this seems a forlorn hope as the Islamists of President Mohamed Mursi struggle with the liberal and leftist opposition over the future character of Egypt following the 2011 revolution.(...)

 

PROBLEMS PILE UP

Since then the problems have piled up. The central bank, which spent $20 billion trying to defend the Egyptian pound during and after the uprising that overthrew Hosni Mubarak, accepted the inevitable. In late December, it began regular dollar auctions, allowing the pound to fall more than eight percent under the new system and taking its total loss since the revolution to 14 percent.

Defending the pound helped to curb a rise in the price of imported goods on which even the poorest Egyptians often depend, but it has been enormously costly for the state.  (..)

 

RALLYING AROUND?

Investment Minister Saleh professes optimism that the nation will rally behind the programme of austerity and reform that is bound to be the price of an IMF deal. "We don't see any reasons why the Egyptian people should reject the programme. They will eventually realise that the benefits they will get will outweigh the load they will carry," he told investors in Dubai on Monday.

Few analysts and economists share his optimism. Even after the parliamentary elections - which will drag on from April to June in four stages - radical change seems remote. (...)

 

More on: http://www.60news.com/news-egypt-s-options-narrow-to-imf-qatar-as-money-runs-191450/





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