Salafi MPs consider EU loan as usury

Salafi MPs consider EU loan as usury

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Mon, 11/02/2013 - 13:45

Salafi MPs on Sunday accused the Muslim Brotherhood of accepting usury after the Shura Council approved an agreement with the European Union and European Investment Bank for funding that will be channeled into social development projects.

The European Investment Bank will provide 45 million euros, while the European Commission will provide 15 million euros as a grant, and the Egyptian state institution, the Social Fund for Development, will provide 30 million euros, bringing the total to 90 million.

Repayment of the loan to the European Investment Bank, the EU's long-term lending institution, will be in semi-annual installments over 20 years, with a grace period of five years, at an interest rate of 2.78 percent.

Salafi MPs requested that the agreement be sent to Al-Azhar in order to get a religious opinion on whether the interest rate of 2.78 percent constitutes usury or not.

Article 4 of the Constitution stipulates that “Al-Azhar Senior Scholars are to be consulted on matters pertaining to Islamic law.”

MPs affiliated with the Muslim Brotherhood's Freedom and Justice Party, who constitute the majority of the council, refused the suggestion and called the speaker to finish the discussion and put the issue to a vote.

MP Abdel Hamid al-Gamal, the Financial Committee's deputy and a member of the Nour Party, said the agreement “is ostensibly good but there are underlying issues.” He said it was important to discuss the agreement further, because European Union initiatives are “often intended to help gather information about Egypt.”

Gamal also called for the agreement to be examined by general and military intelligence. Nagy al-Shehaby, another MP, said the agreement is “fraudulent” and called for canceling the interest on the loan.

Omar Farouq, another Salafi MP, called for amending the agreement while Essam Erian, vice president of the Freedom and Justice Party, said it was not in the jurisdiction of the council to amend the agreement.

The Salafi Nour Party on Monday says that it rejects burdening the state budget with further loans.

The party has dismissed the loan, saying that the details have not been studied sufficiently studied by the council.

Abdallah Badran, head of the party’s Shura Council bloc, issued a statement reiterating that the committee of Al-Azhar Senior Scholars must review the agreement, and adding that the targets and beneficiaries of the loan are remain unknown.

In the statement, Badran said the loan had been hastily approved and had not been subjected to sufficient debate and scrutiny, revealing that it had been discussed in one day, so different political forces did not have the chance to attend and express their views.

The program aims to provide loans to small- and micro-sized businesses, develop areas with high population densities, as well as poor urban and rural areas, and address unemployment.

Last year, there was heated debate regarding the Sharia-compliance of a now delayed loan from the International Monetary. Initially Salafis had stated their opposition to the loan because it constituted usury, but later, prominent Salafi preacher Yasser Borhamy issued a fatwa, or Islamic legal ruling, saying that since the loan’s interest rate is only 1.1 percent, to be paid in the form of administrative fees, it can be considered a grant.