July 1 (Bloomberg) -- Protesters stormed the Muslim Brotherhood’s Cairo headquarters, setting its first floor ablaze hours after hundreds of thousands of Egyptians poured into streets demanding that President Mohamed Mursi step down.
No casualties were reported in the latest attack on the group that fielded Mursi for office. His supporters and opponents engaged in deadly clashes at the building overnight, leaving at least eight people dead, South Cairo Prosecution official Tamer El-Arabi said. Nationwide, 14 people were killed in political violence, said Yahya Moussa, a Health Ministry spokesman. Mursi’s critics called for new rallies tomorrow.
Protesters targeted the Muslim Brotherhood’s headquarters in a show of anger at what they see as the Islamists’ usurping of the 2011 uprising that pushed Hosni Mubarak from power. The violence reflected the deepening divisions in Egypt a year after Mursi was inaugurated as the country’s first democratically elected civilian president.
There are still “those groups that choose to resort to violence as a means of political expression,” Muslim Brotherhood spokesman Gehad El-Haddad said by phone today. “From our perspective, we back the legitimate choice of the people and we will stand firm against any group that is trying to pervert the will of the people.”
The ministers of tourism, environment, communications and state minister for parliamentary affairs submitted their resignations to protest Mursi’s failure to respond to the demonstrations against him, state-run Ahram Gate reported, citing an unidentified Cabinet official. Prime Minister Hisham Qandil hasn’t yet received the resignations, it said.
The intransigence of Mursi’s supporters and opponents has clouded an already troubled political transition, with more unrest liable to break out no matter whether he steps down or stays on.
If Mursi resigns, the “transition to a permanent government will be even longer than it has been,” while a decision to stay on “could continue increasing the risks of confrontation between pro/anti-Mursi crowds and/or security forces,” Raza Agha, chief Middle East and Africa economist at VTB Capital in London, said in an e-mailed note. That could lead the military to consider taking action, he said.
A situation where Mursi remains in power, possibly with a new government and constitutional reforms, may not appease Egyptians or boost the nation’s economic prospects either, he said.
“The principle casualties include the economy, prospects for donor support/reforms, asset prices and sovereign rating,” he said.
The Tamarud, or Rebel movement, that organized the rallies and said it amassed 22 million signatures against Mursi, warned of a civil-disobedience campaign should Mursi not agree by July 2 to its demand for early elections.
The National Salvation Front opposition bloc, in its “Revolution Statement 1,” called on demonstrators to “maintain their peaceful protests” until the “last of the strongholds of this dictatorial regime falls.” Part of the proposed campaign is a general strike.
Egypt’s financial markets have reflected the ferment. The benchmark EGX 30 stocks index slumped 13 percent in June. The country’s default risk soared to a record 888 basis points last week, putting Egypt among the riskiest 10 credits in the world, according to data compiled by Bloomberg.
The yield on the government’s benchmark $1 billion of 5.75-percent eurobonds due 2020 advanced 8 basis points, or 0.08 of a percentage point, to a near-record 10.24 percent as of 1:12 p.m. in Cairo, taking its surge since the start of June to 220 basis points.
A deepening economic crisis has fueled the public anger against Mursi, with unemployment soaring beyond 13 percent and foreign reserves dropping by more than half since the uprising against Mubarak, and fuel shortages sparking long lines at gasoline stations.
While both the Islamists and the opposition had called for peaceful protests, the latest incidents sstoked concern that further violence would be inflamed. The opposition NSF said in an e-mailed statement it condemned all violence.
It urged “the great Egyptian people who have peacefully taken to the streets and squares demanding democratic change and early presidential elections to preserve the peacefulness of this great revolutionary wave.”
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