Egypt Court to Rule on Constitution as Army Warns Islamists

An Egyptian court is set to hear a challenge to the panel charged with writing a new constitution, as the country’s army chief issued a warning to its elected Islamist leaders that may deepen the standoff between them.

Field Marshal Mohamed Hussein Tantawi said yesterday that the military would not allow a “certain group” to dominate the political landscape, according to the state-run Middle East News Agency. The comment, at a ceremony in the city of Ismailiya, was interpreted as directed against the Muslim Brotherhood, from whose ranks newly elected President Mohamed Mursi was drawn.

Mursi lost the latest in a series of battles between politicians and the judiciary last week, when judges shot down his attempt to reconvene the parliament shut down by the army last month following court orders. The next contest may begin tomorrow, when the administrative court is due to assess the legality of the constitutional panel. A previous version of the body was dissolved amid complaints that it was too Islamist and didn’t reflect the country’s variety.

The persistence of tension between political and military leaders underlines the difficulty of restoring stability in Egypt and reviving an economy that stalled after last year’s revolt against Hosni Mubarak. The generals who took over from Mubarak formally ceded power to Mursi last month while making it clear that they would continue to exercise authority.

Egypt’s benchmark stock index, which surged after Mursi was declared the election winner, has pared some of those gains, declining 5 percent since July 3. Yields on benchmark dollar bonds maturing in 2020, which slid to an eight-month low of 6.20 percent earlier this month, were trading at 6.25 percent at 1 p.m. local time today.

Clinton Visit

U.S. Secretary of State Hillary Clinton, who met both Mursi and Tantawi over the past two days during a visit to Egypt, urged them to push ahead with the transition to democracy. Her visit was targeted by protests accusing the U.S. of backing the Islamists, and of legitimizing continued military rule.

The U.S. provides Egypt’s military with more than $1 billion a year in aid. Clinton made no mention of the military’s decision last month to strip the presidency of some of its powers while affording itself temporary legislative authority.

The army’s new powers allow it to set up a new constitutional committee if the current one fails. Some secularists and other groups have boycotted the committee, arguing it is still dominated by Islamists.

The court hearing on the committee’s fate was brought forward from September, a move that left its members expressing concern that the change signalled an intent to disband the body.

“This is a bad signal that the verdict expected Tuesday would be politicized, as usual,” Amr Darrag, the secretary- general of the committee’s executive office, was quoted as saying by the state-run Ahram Online website today.

Mursi yesterday signed a law dealing with the panel’s formation, ratifying legislation that had been passed by the now defunct parliament.

To contact the reporter on this story: Tarek El-Tablawy in Cairo at teltabalwy@bloomberg.net

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

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