Thousands Protest in Cairo Amid Competing Claims

Tens of thousands of Egyptians gathered in Cairo to protest at the military’s seizure of additional powers as the Muslim Brotherhood’s Mohamed Mursi and Hosni Mubarak’s last premier laid dueling claims to the country’s presidency.

The ruling generals’ appropriation of power through a constitutional decree, two weeks before they are to hand over authority to the new president, enraged the Brotherhood and youth activists like the April 6 group that played a leading role in the Egyptian uprising. Protesters returned to the home of the revolution, Cairo’s Tahrir Square, demanding a reversal of what the Islamist group called the military’s “hegemony.”

The decree gave the military additional legislative powers and a say over the drafting of the constitution. It followed a court decision last week to dissolve parliament and fueled charges the military is derailing Egypt’s transition to democracy. The move also stoked investor concern about a recovery in the $240 billion economy and prospects for a $3.2 billion International Monetary Fund loan. Egyptian stocks and bonds extended declines today.

The campaigns of Mursi and Ahmed Shafik both held televised news conferences today to announce they had won about 52 percent of the vote in the runoff.

Former U.S. President Jimmy Carter, whose Carter Center observed the vote, said he was “deeply troubled by the undemocratic turn that Egypt’s transition has taken.”

The military’s decree “violates their prior commitment to the Egyptian people to make a full transfer of power to an elected civilian government,” he said in a statement e-mailed by the group.

Legislative Powers

Under the decree, the military assumed legislative powers until the election of a new parliament, after the previous Islamist-led legislature was dissolved. It also ensured its own budget remained beyond public scrutiny and that it could exercise a hand in writing the constitution, as well as vetoing provisions in the document.

The military sought to reassure Egyptians of its intentions, reiterating that it will hand over power by the end of June in a ceremony full of pomp and circumstance.

“What the military got was legislative power and their privileges and prerogatives guaranteed,” Hani Sabra, Eurasia Group Mideast analyst, said by phone. “They got this because they out-maneuvered the Brotherhood.”

“The party that benefits the most” from the turmoil and unrest over the past 16 months is the military, he said, adding that the decrees were likely a reflection of their calculation on the first day of the runoff that Mursi would prevail.

Market Slumps

The tension was reflected in the markets, with Egypt’s benchmark EGX 30 stock index slumping 4.2 percent at the close Cairo, extending its slide since the first-round election last month to 18 percent. Yields on the country’s 5.75 percent dollar bonds maturing in 2020 advanced for a fourth day, gaining three basis points to 6.97 percent.

Economic growth stalled after last year’s revolt as tourists and investors stayed away. The government’s borrowing costs for one year debt have surged by about 50 percent since the start of last year, and the central bank has spent more than half of the country’s currency reserves.

The protesters massing in Cairo’s Tahrir Square underscored the outrage over the military’s move, suspicion about its motives and the stakes for the Islamist group. The rally was led by the Freedom and Justice Party, the Brotherhood’s political arm headed by Mursi, and also included other Islamists and youth activist groups.

‘Seen as Empowered’

“If Mursi is elected, he cannot afford to be a powerless president or the group will collapse,” said Omar Ashour, director of Middle East studies at the University of Exeter in the U.K. and visiting fellow at the Brookings Doha Center. “It has already lost its popularity in parliamentary elections because of the very same scenario: You’re seen as empowered, but you’re not really.”

The Brotherhood said Egyptians are ready to continue the struggle to prevent “the military council’s hegemony over the reins of power, and the overthrow of democracy,” in a statement on the Freedom and Justice Party’s Facebook page.

The military “wants to have the control buttons of the Egyptian political landscape,” Ashour said, while also reserving the ability to “reset that game at any point” if they don’t like the outcome.

Return to ‘Darkness’

As protesters gathered, the man they ousted more than a year ago had to be revived and have his heart-rate stabilized using a defibrillator, prison department spokesman Brigadier-General Mohamed Elewa said in a phone interview. Elewa said Mubarak was then placed on an artificial ventilator.

Mubarak was transferred from a prison hospital to a military hospital, Elewa said.

With most of the unofficial results now in, Mursi had appealed early on June 18 to all Egyptians, seeking to strike a conciliatory tone. Shafik’s campaign, which had largely vilified the Islamist as part of a group looking to drag Egypt back into “darkness,” claimed that the results showed the career air force pilot and former civil aviation minister winning. It repeated that claim today, just after Mursi’s camp did the same.

Both sides filed challenges with the election commission that will be vetted tomorrow, with official results to be released June 21. The election commission said it “has not finished its work yet” and appealed to all to put the nation’s interests first instead of announcing unofficial results, the state-run Middle East News Agency reported.

Egyptian Feud

The last-minute feuding reflected the tone of the race that pitted the two most divisive candidates to emerge from the first-round vote last month.

Shafik was dubbed by Mursi and others as a member of the old guard looking to revive his former boss’ regime. He said the Brotherhood was actually the old regime and had been involved in killing protesters during the uprising.

Whether those remarks resonated with the broader population, or if it was his law-and-order campaign, the roughly 4 percentage point difference that separated both men, irrespective of who was claiming victory, highlighted the polarization that had developed in Egypt and the challenges the Brotherhood faced.

Along with the stripped-down presidency its candidate could inherit, an administrative court in Cairo today deferred until September a hearing in two lawsuits seeking to dissolve the group on the grounds that it was not properly registered.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE