CAIRO: Egypt's interim ruling military council has decided to resume talks with the International Monetary Fund (IMF) over a $3.2 billion loan package proposed last June, as the country's economic crisis deepens. Officials in Egypt have hesitated to accept the loan due to reservations about borrowing from abroad. Meanwhile, the IMF has stood aside, waiting for officials to re-open negotiations if desired. “The IMF has not formulated any special terms for aid to Egypt,” said Finance Minister Mumtaz al-Saeed last Saturday, announcing the latest decision to resume talks. Officials in Egypt have instated that any loan package must come unconditionally, stalling the negotiation process thus far. With continued uprisings and three cabinet reshuffles since the ousting of former President Hosni Mubarak, the nation's economy has been left hard hit. Once making up 15 percent of the nation's revenue, Egypt's tourism industry has plummeted, operating at nearly 50 percent of its capacity. Instability has scared away much foreign direct investment as well, and the country's foreign reserves have dropped 50 percent over the last year to $18.1 billion. Egypt's Central Bank announced last week that it had only sold half of the 7-year debt bonds it was selling off on behalf of the government, as investors fear that the Egyptian pound is headed for a sharp decline. Though the government announced $3.3 billion in spending cuts along with various proposed austerity measures meant to reduce government spending by three percent, some fear that this may not be enough. The United States has also discussed economic aid, including investment in a proposed industrial zone for small and medium-sized business that would provide about half a million jobs. As Egypt struggles through its transitional period, the government may fail to meet even the most basic social needs of its people. BM ShortURL: http://goo.gl/vGcL6 Tags: Debt Crisis, featured, IMF loan Section: Egypt, Latest News
