CAIRO: With an International Monetary Fund (IMF) loan deal stalled as Egypt continues to face an uncertain political future, the European Union on Thursday said it would offer the country more than 6.5 billion euros as grants and soft loans in order to assist the country to get back on the right track economically, the Federation of Egyptian Chambers of Commerce said. It is part of the global push to help Egypt reboot its downtrodden economy after the January 2011 uprising ousted former President Hosni Mubarak in mass protests. President of the European Council Herman Van Rompuy has said these funds will be given to Egypt during the 2012/2013 fiscal year, the federation said in a statement reported by the state-owned news agency MENA. These funds were agreed upon during the EU-Egyptian action plan that was held in Cairo on 12-13 November 2012 to back the democratic transition process. Rompuy pointed to the importance of creating trust among all sides to find a way out of the current economic crisis that is aggravating due to the opacity of the political situation, adding that the economy should be given the same amount of attention given to politics. The economic reform program in Egypt is being negotiated with the IMF, Rompuy said. Procrastination is not the best solution because the IMF deal will restore confidence in the Egyptian economy and provide the necessary funding for economic and social revival, he added. The EU is the top trade, tourism, and investment partner to Egypt since it provides more than 80 percent of the direct foreign investments in Egypt, head of the Federation of Egyptian Chambers of Commerce Ahmed al-Wakeel said. In December, Egypt asked the IMF to postpone the loan deal worth $4.8 billion as it did not want to implement tax increases that enraged many Egyptians across the country. The tax increases were part of IMF stipulations for the loan agreement, which was approved recently by the international development organization. “In light of the unfolding developments on the ground, the Egyptian authorities have asked to postpone their request for a Stand-By Arrangement with the IMF," said a statement from the IMF sent to media on Tuesday afternoon Cairo time. “The Fund remains in close contact with the authorities, and stands ready to continue supporting Egypt during the ongoing transition and to consult with the authorities on the resumption of discussions regarding the Stand-By Arrangement," it added. But the loan deal has not been seen as necessarily positive by opposition groups in the country, who had demanded that there was a national dialogue ahead o approving the deal. “This is a loan that in the end we all know who is going to pay for it, Egyptians and nobody wanted to hear our criticism and frustration," activist Amr Mohamed, 28, who has spoken out on the loan on social media networks, told Bikyanews.com after the loan was announced in November. An IMF staff mission headed by Andreas Bauer, Division Chief in the Middle East and Central Asia Department, and the Egyptian authorities said that they had reached a staff-level agreement on a 22-month Stand-By Arrangement (SBA) in the amount of about $4.8 billion. But activists and NGOs in Egypt have repeatedly said that the entire process has been void of transparency and had recently come together to oppose the loan, demanding that the government of President Mohamed Morsi end discussions with the IMF. It didn't happen. In early November, a group of 17 political parties, NGOs and human rights associations in Egypt have called for loan negotiations with the International Monetary Fund (IMF) to be ended immediately, citing a lack of transparency and the undemocratic nature of the current development. Among the groups were the Popular Current Party, The Egyptian Current Party, The Strong Egypt Party as well as rights NGOs New Woman Foundation, Hisham Mubarak Law Center, Habi Center for Environmental Rights, Cairo Institute for Human Rights Studies, Egyptian Women Legal Aid and others. “The negotiations of the terms and conditions of the loan agreement, including the government's economic reform program, have lacked transparency on the part of both the IMF and the Government of Egypt," said the statement sent to media outlets. BM
