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Egypt Seeks Islamist Arrests as Brotherhood Shuns Cabinet

July 11, 2013

Egypt Orders Islamists Arrested as Brotherhood Shuns Cabinet

An opponent of Egypt's Islamist President Mohamed Morsi next to a banner reading in Arabic "Leave, people want the fall of the Muslim Brotherhood" during a protest calling for his ouster outside the presidential palace in Cairo on June 30, 2013. Photographer: Mahmud Khaled/AFP via Getty Images

Egypt’s interim Prime Minister Hazem El-Beblawi worked to build a Cabinet even as an arrest warrant for the Muslim Brotherhood’s top leader fueled tension between Islamists and the military.

Prosecutors sought Mohammed Badie, the head of the Brotherhood which fielded ousted President Mohamed Mursi, and nine others on grounds they encouraged Cairo violence on July 8 when dozens were killed by security forces. As the detention orders were announced, Hamza Zawba, a spokesman for the Brotherhood’s political arm, said it won’t engage in talks until Mursi is reinstated.

“We’re not going to take part in an illegitimate process, or in talks held over the bodies of martyrs,” Zawba said by phone. “The whole post-June 30 political process is void,” he said, referring to the start of protests against Mursi that culminated in his removal by the military.

El-Beblawi, who was appointed July 9, is seeking to put together a team of ministers to revive a crumbling economy and address months of political polarization. Egyptian bonds gained for a second day, sending yields to the lowest level in five weeks, after $12 billion of aid pledges from the Persian Gulf.

Yields Drop

The yield on the government’s $1 billion of 5.75 percent notes declined 30 basis points to 8.39 percent at 11 a.m. in Cairo, the lowest on a closing basis since June 6, according to data compiled by Bloomberg. The yield dropped 69 basis points, or 0.69 percentage point, yesterday after Saudi Arabia, Kuwait and the United Arab Emirates offered the money in the form of grants, central bank deposits and petroleum products.

Egypt’s default risk also fell to the lowest in more than a month. Five-year credit default swaps decreased 25 basis points to 650, the lowest since May 31, according to data provider CMA. The nation’s default risk is still among the 10 highest in the world.

Egyptian officials will meet today with a delegation from Bahrain, the presidency said in an e-mailed statement.

The new military-backed administration faces opposition from Mursi supporters who described the removal of the former leader as a coup against Egypt’s first democratically elected civilian president.

El-Beblawi said that while he’s talking to a variety of political groups, it will be difficult to secure the backing of all Egyptians, the state-run Al-Ahram reported today.

Khaled Dawoud, spokesman for the National Salvation Front, a bloc that opposed Mursi, said the Brotherhood needs to “recognize the new reality.”

‘Popular Demand’

“The Muslim Brotherhood will keep on isolating themselves further, not just by rejecting government posts but, most importantly, by inciting violence,” he said. “They have to admit that President Mursi went out of office not because of a military coup; he went out of office upon popular demand.”

The arrest warrants sought the detention of Badie, deputy Brotherhood leader Mahmoud Ezzat and others, according to the state-run news agency yesterday.

The warrants are “politically motivated” and intended to dismantle the protest movement, Brotherhood spokesman Gehad El-Haddad wrote on his Twitter account, and employed the “same old police state tactics.”

Economy Woes

Gunmen fired on the Egyptian army’s North Sinai commander last night in an attack that left a child dead, the military said in statement on Facebook.

El-Beblawi, a former finance minister, has inherited an economy stuck in the worst slowdown in two decades, record unemployment and foreign reserves that are more than 50 percent below their December 2010 levels. Egypt got some relief from announcements of aid from other Arab countries: Kuwait extended a $4 billion aid package yesterday, adding to the $8 billion pledged by Saudi Arabia and the United Arab Emirates.

Cabinet negotiations will last a “few days,” El-Beblawi said in an interview July 9. Nobel Laureate and leader of the anti-Mursi campaign Mohamed ElBaradei was named vice president for foreign relations.

The premier was willing to offer ministerial posts to the Brotherhood’s political arm, from which Mursi hails, presidential adviser Ahmed El-Meslemani told satellite channel CBC in an interview earlier this week. Zawba, the party spokesman, said the group hasn’t officially received any offers.

Mursi’s critics say the former president betrayed the goals of the 2011 revolt that ousted former leader Hosni Mubarak, focusing on tightening the Islamists’ grip on power instead of working to improve the lot of many Egyptians.

‘Disproportionate Force’

What triggered the violence that left over 50 people -- mostly Mursi supporters -- dead in the capital this week is disputed. The military said it was responding to an armed attack, while the Muslim Brotherhood said the assault on Mursi’s supporters was unprovoked.

The early morning shoot-out outside the compound of the Republican Guard marked the deadliest single incident since the army deposed Mursi on July 3.

The deaths cast a pall on the political process at a time when Mansour had issued a 33-article constitutional declaration on July 8 that provided more of a timeline than specific target dates for planned ballots. It proposed a referendum on amendments to the suspended 2012 Islamist-backed constitution, to be followed later by parliamentary and presidential elections.

The declaration soon ran into opposition, including from main players in the loose alliance against Mursi.

Bassam Al Zarqa, an official with the Salafist Nour Party, the only Islamist group to support the removal of Mursi, said it gave interim President Adly Mansour too much power.

The National Salvation Front said it wasn’t consulted and that it rejects some articles and wants others amended or added. Reservations include wanting a new constitution, not an amended one, front spokesman Dawoud said.

Islam Hammam, a member of the Tamarod movement, a youth group that helped organize the anti-Mursi protests, said the framework “lays the foundation for dictatorship.” He said it grants the president “absolute and unrestricted power.”

To contact the reporters on this story: Mariam Fam in Cairo at mfam1@bloomberg.net; Salma El Wardany in Cairo at selwardany@bloomberg.net

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


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