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Howard Schneider | Despite turmoil, billions in loans flow to Egypt





The United States and a coalition of international lendersare pushing ahead with billions of dollars in loans and other help for Egypt and neighboring states, despite the region’s sometimes violent political turmoil, hoping to head off a destabilizing economic collapse.

The risks involved in the effort have been on sharp display in Egypt in the clashes between protesters and forces loyal to President Mohamed Morsi, whose Islamist government must be trusted by the United States, the International Monetary Fund, the World Bank and others to deliver on commitments made in return for international support.

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  • CBDenver

    Don’t worry, they’re just loans.  They will be paid back.  /sarc

  • John_Frank

    FYI – The IMF was going to address the Egyptian request for a loan on 19 December.

    On Sunday morning, the Egyptian President announced a series of tax increases, including sales tax increases on consumer items, construction supplies and income tax increases.

    The appropriate notice was filed in the Egyptian Government register.

    At 2:00 pm EET on Monday, the Egyptian President, in the face of growing political protests coming from his own party suspended the implementation. The announcement was made by a note to his official FB page.

    Later that day, the President issued a call for a "dialogue" on the matter, claiming that he did not want to impose a "burden on the people."

    According to press reports, the President’s suspension of the announced tax increases "surprised" the Egyptian Prime Minister and his cabinet.

    The tax increases are part of the Egyptian Government"s plan to bring its fiscal situation in order, being included in the loan proposal submitted to the IMF

    On Tuesday, the Egyptian government asked that the IMF delay dealing with the loan request due to the present "political instability" in the country.

    The earliest the IMF can now respond to any loan request by the Egyptian Government is mid-January, 2013.

    It is an open question as to whether the Egyptian Government can push through the planned tax increases in the face of sustained protest from the President’s political party, which is the political arm of the Muslim Brotherhood.

    Also there is a very human rights serious scandal brewing in Egypt, which may reach all the way to the President.

    Last Wednesday, during the deadly riots, credible evidence has surfaced that:

    - the bullets which killed a number of people came from guns used by the Muslim Brotherhood militia.

    - members of the Muslim Brotherhood captured and tortured a number of the anti-Morsi protesters in an effort to gain "evidence" that the anti-Morsi protesters were paid thugs.

    - the beatings were carried out in the presence of the police.

    - the collected "evidence" was used by the President to support claims in his speech on Thursday that "nefarious forces" were behind the deadly riots.

    - attempts have been made by the Attorney General to cover up the evidence of the beatings.

    In addition, a report has been published that the CIA and the White House is aware that the Egyptian Government recently purchased scud missile parts from North Korea in violation of the U.N. sanctions.

    Finally a number of very credible commentators have stated that based on various sources the Muslim Brotherhood leader who recently called for a jihad against the Jews and Israel is a member of a council which is giving directions to and controlling the Egyptian Presidency.

    Put everything together and one has to ask, is priority access to the Suez Canal for our navy and fly over rights over Egypt for our airforce worth the price of a multibillion dollar loan facility to Egypt?

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