Egypt’s Muslim Brotherhood Calls for Protests

Thousands of Muslim Brotherhood supporters rallied in Cairo to protest the army’s ouster of Islamist President Mohamed Mursi and the military-backed interim administration that’s seeking to arrest its leaders.

Crowds thronged to Rabaa square in the capital, where they held photos of Mursi and waved flags. “Mursi is the legitimate president, no to the coup,” read one banner.

Security forces have arrested a number of Brotherhood officials since the military swept Mursi from power July 3 on a wave of protests by critics who accused him of leading an Islamist power grab. Prosecutors issued arrest warrants on July 10 for Mohammed Badie, the group’s top official, and nine other Islamists on grounds they ignited a confrontation in Cairo on July 8 in which more than 50 people, most of them Mursi loyalists, were killed in clashes with the army.

A police officer was killed and another was wounded today when a rocket-propelled grenade fired by unidentified attackers hit their armored vehicle while on patrol on El-Arish airport road in the Sinai peninsula, the Interior Ministry said in an e-mailed statement.

Amid the turmoil, the new prime minister, Hazem El-Beblawi, is trying to form a government that will be asked to revive a crumbling economy and end deep political rifts.

The government’s priority will be “security first, then the economy,” El-Beblawi said in an interview with the Asharq Al-Awsat newspaper, expressing confidence the army will be able to restore security in the Sinai.

Suez Canal

The political unrest and security incidents won’t affect the safety of vessels in the Suez Canal, he said. The 193-kilometer (120-mile) waterway handles 8 percent of world trade, connecting the Mediterranean and Red Seas.

Egyptian bonds gained for a third day, following $12 billion of aid pledges poured in from the Persian Gulf.

The arrests of Muslim Brotherhood members “are not in line with the reconciliation that the interim government and military say they are pursuing,” U.S. State Department spokeswoman Jennifer Psaki said yesterday. “If politicized arrests and detentions continue, it is hard to see how Egypt will move beyond this crisis.”

Talks Refusal

El-Beblawi said that while he’s talking to a variety of political groups, it will be difficult to secure the backing of all Egyptians, the state-run Al-Ahram newspaper reported.

“Everybody is requested to join this political process,” Badr Abdelatty, spokesman for the Ministry of Foreign Affairs, told reporters yesterday. Those involved in violence are being dealt with “within the existing judicial system, nothing more, nothing less, nothing extraordinary,” he said.

Complicating El-Beblawi’s task is the Brotherhood’s refusal to participate in talks. The group rejects the opposition’s argument that the military intervened in response to mass protests fueled by complaints that Mursi hijacked the democratic process to try to impose an Islamist agenda and monopolize power.

“We’re back to the same old police state and tactics we used to see before the Jan. 25 revolution,” Zawba said, referring to the 2011 uprising that toppled Hosni Mubarak.

Peaceful Protests

The Brotherhood vowed to maintain peaceful protests.

“We will continue our peaceful resistance to the bloody military coup,” the Brotherhood said in an e-mailed statement, referring to the ouster of the democratically elected Mursi, whom it backed. “We are confident that peaceful popular will is going to triumph over aggression and injustice.”

The army won’t act as long as the demonstrations are peaceful and don’t approach or attempt to harm military and other vital installations or citizens, armed forces spokesman Ahmed Ali told reporters yesterday.

“If these protests, however, deviate from peacefulness,” he said, “there are rules of engagement that will be applied.”

Mursi is being “held for his safety,” because there are people who are “angry from both sides,” Ali said. The former president is “well treated” and hasn’t been charged with any crimes, he said.

Even some members of the coalition that backed the military’s overthrow of Mursi have voiced reservations about interim President Adly Mansour’s blueprint for elections and the temporary legislative powers he has given himself.

Economic Slowdown

Egypt’s economy is stuck in its worst slowdown in two decades. Unemployment is at a record high, and foreign reserves are less than half their levels in December 2010, two months before longtime leader Mubarak was toppled in the popular uprising that eventually ushered Mursi into power.

The U.S. will continue to provide assistance to Egypt and all aid programs “still are moving,” Psaki said in response to a question about whether the U.S. will deliver F-16 jet fighters to the country following Mursi’s ouster. “We are continuing to provide assistance and don’t see the benefit of changing that.”

Egypt got some relief from announcements of aid from other Arab countries: Kuwait extended a $4 billion aid package July 10, adding to the $8 billion pledged by Saudi Arabia and the United Arab Emirates.

Yields on the government’s $1 billion of Eurobonds due 2020 dropped 5 basis points to 8.32 percent by 4:15 p.m. in Cairo, the third day of declines and bringing the decrease this week to 75 basis points. That’s the lowest level on a closing basis since June 4. The EGX 30 Index of stocks yesterday slipped 0.9 percent, bringing a drop in the week to 1.1 percent.

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