Aid on the spotlight anew as Egyptian president assumes new powers

On top of domestic protests, Egyptian President Mohammed Morsi’s latest decree giving him sweeping emergency powers has prompted some members of the international community to question aid to the Arab country. Photo by: Jonathan Rashad

On top of domestic protests, Egyptian President Mohammed Morsi’s latest decree giving him sweeping emergency powers has prompted some members of the international community to question aid to the Arab country.

At least one member of the European Parliament, for instance, has suggested freezing planned EU aid of up to €5 billion ($6.5 billion). Marietje Schaake of the Netherlands also asked EU foreign affairs chief Catherine Ashton if she is “willing to condemn” Morsi’s declaration, which shields him from judicial oversight, among other privileges.

Ashton, through her representative, had commented on the declaration shortly after its announcement last week, stressing the importance of completing the democratic process in the country “in accordance with the commitments undertaken by the Egyptian leadership.”

Meanwhile, Republican Sen. John McCain of Arizona has urged the Obama administration to “condemn” Morsi’s declaration. He also suggested using U.S. aid to Egypt to pressure the Arab president to “abandon his new powers.”

“Our leverage is obviously, not only the substantial billions in aid we provide, plus, debt forgiveness and an [International Monetary Fund] deal … marshaling world public opinion is against this kind of move by Mr. Morsi,” McCain said in interview with Fox News, as quoted by the Hill.

He further stressed that “American taxpayers expect” U.S. President Barack Obama to tell Morsi that U.S. aid dollars “will be directly related to the progress toward democracy.”

Closer to IMF deal

Also in the past week, Egypt has gotten closer to securing a much-needed $4.8 billion loan from the international financing institution.

IMFstaff members and Egyptian authorities have reached an agreement on the loan, which would support the country’s economic program through fiscal 2014. The request is expected to be submitted for approval to theIMF executive board within the next few weeks.

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    Ivy Mungcal

    As senior staff writer, Ivy Mungcal contributes to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.

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