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The Egyptian government has entered negotiations with the International Monetary Fund for a US$4.8 billion loan, Prime Minister Hesham Qandil announced Wednesday in a press conference following a meeting with Managing Director of the IMF Christine Lagarde and President Mohamed Morsy.
Qandil said he hoped Egypt could reach a deal by the end of the year. He said the visit's objective was to show support for the economy.
Lagarde said Wednesday that no obstacles face the upcoming negotiations between the IMF and Cairo over the requested loan, adding that talks over the loan will continue, and that she expected it to take some time.
She said the loan will be administered in intervals, with the process being revised after every portion.
Egypt has been in on-and-off-again negotiations for an IMF loan for over a year, following a recession brought on by the country’s political turmoil. Successive governments have negotiated with the IMF to secure emergency funding that officials had put at $3.2 billion, but they continually stalled by political turnover and domestic opposition to the IMF loan.
Lagarde and Qandil both emphasized Egypt’s oversight and control of the financial plan for loan, saying it has been initiated and designed by Egyptian experts.
Lagarde also downplayed concerns over the absence of a legislative body during the talks over the loan.
She said the Washington-based institution wanted to support Egypt and said that an IMF team would discuss details on a loan package to help the economy.
“This is Egypt’s journey,” Lagarde said.
Following the meeting, Lagarde released a statement listing some of the issues the loan seeks to tackle. “Egypt faces considerable challenges, including the need to restart growth and reduce budget and balance of payments deficits."
"The Egyptian people have legitimate expectations for a better life and greater social justice. We at the IMF, stand ready to help,” the statement read.
She said details and terms for the loan still had to be worked out and the IMF team would hold more talks on Thursday in Cairo before returning to Washington and coming back to Egypt for further discussions.
Meanwhile, dozens of protesters gathered at the cabinet building in downtown Cairo rejecting what they called “unfair conditions” placed on Egypt to receive IMF loan.
The protest coincided with the talks held between Qandil and Lagarde, who earlier met with Egyptian president Mohamed Morsy.
Protesters chanted “we are the free revolutionaries, no to impoverishing policies.” One protester, Haitham Mohamadeen, told Al-Masry Al-Youm that “the main reason for the protest it the unfair conditions placed on Egypt in a trial to control the peoples and the government decisions, and to make Egypt dependent on the west.”
Qandil played down fears of IMF-imposed conditions on the economy, saying that terms and conditions are a part of taking out a loan from any bank, even a small Egyptian bank.
“The extra value that Egypt will have is access to the IMF’s experts,” he said.
Experts have advised that the country take the loan to help boost the struggling economy and alleviate a foreign currency crisis. The loan is also seen as a vote of confidence in the government’s budget and fiscal plan and an indication that it is safe for foreign investors to return.
Lagarde said that so far talks are still in preliminary stages, and a full delegation will arrive in September to see the details of administering the loan.