Egypt Independent

FJP leader: IMF loan approval contingent on adopting party’s economic reforms

A Freedom and Justice Party leader demanded Thursday that 

the Cabinet adopt the party’s economic reform program in order for it to approve a US$4.8 billion loan currently being negotiated with the IMF.

An International Monetary Fund delegation arrived in Cairo Wednesday for loan negotiations, which are expected to carry on for two weeks.

“We require that the economic program proposed by the Cabinet to the IMF be in line with the vision of the [FJP] and its program,” Abdallah Shehata, head of the FJP’s economic committee, told Al-Masry Al-Youm.

Former People’s Assembly MP Saber Abouel Fotouh said the FJP would approve the loan if it is “unconditional,” or free from any economic obligations of the Cabinet. He added that the loan should have a stable interest rate.

Abouel Fotouh emphasized that the FJP would discuss the terms of disbursing loan funds and establishing investment projects with the Cabinet before approving the loan. He also ruled out the possibility of the Cabinet adopting an austerity plan to obtain the loan.

On Wednesday, Shehata told Reuters in an interview that no disagreements exist between the FJP and the government over the proposed loan. Shehata also denied statements attributed to him saying there would be no loan without an elected Parliament, and that any progress on the loan through negotiations is unlikely in 2012.

“On the contrary, we are always accused of helping the government," Shehata noted.

A senior IMF official told Reuters that the planned agreement should focus on reducing the Egyptian budget deficit without hindering economic growth. The IMF talks in Cairo aim to reach an agreement before the end of this year.

Edited translation from Al-Masry Al-Youm