Egyptian Prime Minister Hisham Qandil said talks to secure an International Monetary Fund loan would be “back on track very soon,” as the European Council president said a possible deal with the fund would help rebuild investor confidence.
“We are committed to reform,” Qandil said today at a conference in Cairo. Egypt invited a mission from the IMF “to again realign the program so we can move forward with our national reform program.”
Egypt is seeking to secure a $4.8 billion IMF loan that the government says will help boost investor confidence and encourage other lenders and donors. Egypt asked for a delay last month after President Mohamed Mursi suspended tax increases linked to its IMF-backed economic plan amid political tensions. An IMF team is due to come to Egypt in two to three weeks, presidential spokesman Yasser Ali said on Jan. 8.
Speaking in a joint press conference with Mursi, European Council President Herman van Rompuy said an agreement with the IMF “will open the door to further lines of credit and will help re-establish the confidence of international investors and economic partners.”
It is ultimately growth that will help overcome high unemployment, he said.
“I welcome, therefore, the fact that important discussions with the IMF are continuing,” he said. “Nevertheless, postponing action is not an option.”
Trying to secure the loan is part of the government’s efforts to help boost an economy battered since the uprising that ousted President Hosni Mubarak in 2011.
Van Rompuy said the European Union stands ready to support Egypt’s transition to democracy.
“A rich trade and cooperation agenda is being developed including the offer of an early negotiation of a deep and comprehensive free trade agreement,” he said.
Financial pledges made by the EU and “associated financing institutions” will have “to work in tandem with the arrangement with the IMF,” he said. He also discussed with Mursi “the recovery of assets.”
He said he told Mursi that the EU is ready to send an electoral observers’ mission. Regaining “political trust is also crucial to address the economic situation,” he said. “Political stability and a clear legislative framework are vital to bring back investors, trade partners and tourists.”
Mursi, speaking at the same conference, said that when parliament “is formed within about three months, the democratic march to build institutions in Egypt will be complete.”