State Department Supports Egyptian IMF Loan Request

Photo Credit: Reuters/Asmaa Waguih

At a press briefing on August 23, State Department spokesperson Victoria Nuland confirmed U.S. support for Egypt’s $4.8 billion loan request to the IMF. She outlined Secretary of State Hillary Clinton‘s commitment to a three-stage process which would allow Egypt to address its budgetary concerns.  The plan, which included an IMF visit to Egypt, incorporates U.S. economic aid and the promotion of U.S. business investment in the country. IMF director general Christine Lagarde has been reluctant to reveal specifics on a potential loan for Egypt, but she reiterated that  serious economic and political reform must accompany any financial package. The loan would allow authorities to address short-term economic issues associated with rising food prices and high unemployment, yet “it is the Egyptian people who will cough up [the money],” says Ibrahim Eissa of Al-Tahrir newspaper.

While Egypt’s leaders  look for ways to bridge their budget deficit, an advisory body to the country’s constitutional court is expected to wrap up its deliberations on parliament next week. Their report will recommend whether or not parliament’s upper house should be disbanded, allowing the court to set a date to determine the legality of the chamber’s election law. At the same time, Egypt’s attorney general ordered an investigation of Mohamed Abu-Hamed, a former lawmaker, over claims that he encouraged the downfall of the current regime by leading a protest march on August 24 against President Mohamed Morsi.

Finally, an opinion piece in the Los Angeles Times implored the Obama Administration to continue to press Egyptian leaders on democratic reform, respect for minority rights, and continuation of their international obligations. The article encouraged President Barack Obama to make use of President Morsi’s visit to the U.S. next month as an opportunity to emphasize the importance of Egypt’s commitment to democracy.