Bloomberg News

Mursi Seeks Merkel’s Backing in Break From Deadly Egypt Unrest

January 30, 2013

Egyptian President Mohamed Mursi

As Egyptian President Mohamed Mursi tries to consolidate power, Egypt is seeking a $4.8 billion loan from the International Monetary Fund that his government says will boost investor confidence and encourage other lenders and donors. Photographer: Jin Lee/Bloomberg

Egyptian President Mohamed Mursi is making a shortened visit to Germany amid political unrest at home and warnings by German politicians that expanded economic ties depend on his government’s adherence to democracy.

Chancellor Angela Merkel plans to receive Mursi with military honors for talks at the chancellery in Berlin today at 1:30 p.m., followed by a joint news conference. Mursi also plans to meet German lawmakers and give a speech to a private foundation. He canceled a visit to France set for Feb. 1, presidential spokesman Yasser Ali told reporters in Cairo yesterday.

“My advice is strategic patience -- that we say what we want to say, but that we don’t let the communications break down,” German Foreign Minister Guido Westerwelle said on ARD television today. German aid to help Egypt’s transition depends on “the advance of democracy” in the country, he said.

The European Union, Egypt’s biggest trading partner and largest source of direct foreign investment, has pledged to help modernize the most populous Arab country after the revolt that toppled President Hosni Mubarak in February 2011. Egypt is Germany’s top trading partner in the Arab region except for the United Arab Emirates and Saudi Arabia, according to the Economy Ministry in Berlin. Germans are the second-biggest group of tourists visiting Egypt after Russians.

As Mursi tries to consolidate power, Egypt is seeking a $4.8 billion loan from the International Monetary Fund that his government says will boost investor confidence and encourage other lenders and donors. Germany is providing 150 million euros ($203 million) in aid to Mursi’s government and offering 240 million euros in debt forgiveness, Westerwelle said in August.

‘Economic Support’

“Mursi is coming to Germany mainly in search of economic support,” Philipp Missfelder, the foreign-policy spokesman in parliament for Merkel’s Christian Democrats, said on Phoenix television. “If he wants to create a positive investment climate or lure German tourists back to Egypt, that can only succeed if the human rights situation improves, in particular the Christian minority’s situation.”

Egypt’s political feud is eroding stability as its economy grows at the slowest pace in two decades. The pound has slid 7.5 percent since the central bank introduced daily dollar auctions last month to shield dwindling reserves.

The pound will decline another 6 percent this quarter as the country suffers its worst political crisis in two years, according to a Bloomberg News survey of bankers that take part in central bank auctions.

Emergency Measures

In the latest attempt to stem the crisis, Mursi gave three regional governors authority to review emergency measures imposed in their provinces after the violent unrest led his defense chief to warn of the possible collapse of the state.

The move failed to quell unrest in the three Suez Canal provinces. Thousands defied a curfew for the second consecutive night to chant against the Islamist president and his Muslim Brotherhood backers, in the wake of the deaths of over 50 people during protests in the past week.

The unrest has gained momentum since Jan. 25, the second anniversary of the start of the uprising that ousted Mubarak. The opposition, which is mostly secular and led by youth activists, says Mursi’s only aim is to cement Islamist rule. The president, who took power after elections in June, has imposed decrees that temporarily expanded his powers and backed a constitution drawn up largely by Islamists, which was passed in a referendum last month.

To contact the reporter on this story: Tony Czuczka in Berlin at aczuczka@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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