Bloomberg News

Egypt Parliament Set to Reconvene as Courts Refuse to Back Down

July 10, 2012

Egyptian lawmakers may heed President Mohamed Mursi's call for them to return to their parliamentary offices today, defying judges who yesterday upheld an earlier ruling and ignoring a warning from the military.

Even as parliament speaker Saad El-Katatni called for the reconvening, the country’s top court is examining appeals to overturn Mursi’s July 8 decree, setting the stage for a clash that will either strengthen the president’s hand or weaken his authority less than two weeks after he took office.

The Constitutional Court said yesterday its rulings, which led to a military decision to dissolve Islamist-dominated parliament last month, are final and binding. The Supreme Council of the Armed Forces, the body known as SCAF that ruled Egypt since last year’s uprising until Mursi’s election, said it will “side with legitimacy, the constitution and the law.”

Mursi’s decision to reinstate parliament is “part of the broader tug of war between SCAF and the Muslim Brotherhood,” Hani Sabra, an analyst at Eurasia Group said. “The courts, which already ruled against parliament’s constitutionality, are likely to rule against Mursi, and the Brotherhood will be stymied in its effort to get Egypt’s dissolved parliament reinstated.”

Mursi’s Freedom and Justice Party, the political arm of the Muslim Brotherhood, won almost half of the seats in the legislature in elections this year. Together with the Salafi Nour Party, Islamists controlled more than two-thirds of the assembly. Mursi won a narrow majority of votes in a presidential runoff last month.

IMF Loan

The struggle has deepened divisions in a country recovering from the chaos that accompanied last year’s uprising that ousted President Hosni Mubarak, a former commander of the air force. Economists at HSBC Holdings Plc, Bank of America Merrill Lynch, have said delays in Egypt’s transition to democracy may delay a $3.2 billion loan agreement with the International Monetary Fund, seen crucial to stem the worst decline in foreign reserves since 2004 and lower record government borrowing costs.

Mursi’s decree also says parliamentary elections will be held within 60 days of the approval of a new constitution in a referendum. The charter has yet to be drafted. The benchmark stock index tumbled 4.2 percent, the biggest intraday drop since June 19, at the close in Cairo yesterday.

“What we’re seeing is yet another round inside the country about how to restructure power in a major way,” said Brian Katulis, a senior fellow at the Center for American Progress in Washington. “I don’t know what Mursi’s legal authority is to reinstate the parliament, but the military has had a great deal of autonomy and that will likely decline over time.”

The president’s move comes after the military council last month decided to retain legislative powers following a high court ruling that the law governing voting for the Islamist- controlled parliament was unconstitutional.

“The courts can say one thing, the president can say another thing and SCAF can say another thing, but it’s how these things are perceived, most importantly by the Egyptian people and international investors, that’s adding to the pressure,” said Richard Odumodu, London-based portfolio manager at Silk Invest Ltd.

To contact the reporters on this story: Alaa Shahine in Dubai at asalha@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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