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Saturday, January 19, 2013

Egypt’s and IMF negotiations over the $ 4.8 billion loan continue

International Monetary Fund (IMF) is holding the advanced talks with Egypt regarding the $ 4.8 billion loan requested by Egypt for rebuilding its struggling economy. Christine Lagarde, Managing Director of IMF, announced it during the press conference in Washington, USA. She also added that IMF is holding the similar negotiations with other Arab countries, such as Tunisia and Libya.

Egypt has started the talks with IMF about the financial aid in summer 2012, but the loan was met with some disagreements within Egyptian society. Some political powers and activists, especially leftists and socialists, have been strongly opposing the idea of this loan as they consider it being useless for Egypt’s economy. It’s worth mentioning that the issue of the IMF loan still remains controversial question for Egypt.

Special technical team of IMF has arrived to Cairo in autumn 2012 for the talks with Egypt’s government and economic authorities and for studying the country’s economic situation and also the plan of economical reforms to be imposed in the country. The talks have been successful but they have been postponed in November due to political instability in Egypt caused by Mohamed Morsy’s constitutional declarations and the following Constitutional referendum. The negotiations have been resumed after the situation stabilized and are now on the advanced level, according to IMF officials..

Christine Lagarde has also stressed that supporting of the Arab Spring countries is one of the main priorities of the IMF and the requested loan should help Egypt to stabilize its economy and to develop the situation in the country on the stage of transition to democracy.

IMF’s Christine Lagarde also added that the economical reforms should be imposed in Egypt in attempt to improve financial situation and fight the unemployment in the country granting more stability and growth for the country. The reforms should be imposed urgently.

Herman Van Rompuy, President of European Council, also announced on Thursday, 17 January, during his speech at the meeting of the Federation of Egyptian Chambers of Commerce in Cairo, that EU will grant Egypt another loan of $ 6.5 billion dependent of the IMF loan.

When the IMF loan will be sealed with Egypt, EU will support Egypt with the loan and grants equal $ 6.5 billion. European countries are interested in supporting Arab Spring countries, stressed Herman Van Rompuy. In addition to that the negotiations over the full-fledged free trade agreement between Egypt and European are expected to be held after granting the IMF loan.