Egypt Muslim Brotherhood would consider IMF aid

Fri Jan 13, 2012 6:21am GMT

By Andrew Torchia and Patrick Werr

CAIRO (Reuters) - Egypt's Muslim Brotherhood would consider supporting a deal to obtain emergency aid from the IMF, providing there are no conditions attached and alternatives are explored first, a senior official in the Brotherhood said.

With the risk of a currency crisis simmering in the economic upheaval that has followed President Hosni Mubarak's overthrow last February, the military-backed government is about to start talks with the IMF on an emergency loan package.

"There is no objection to borrowing. But it must be without conditions. And it should be in accordance with national priorities," Ashraf Badr El-Din, the head of the Islamist movement's economic policy committee, told Reuters in an interview on Thursday.

"There are alternatives that the government must resort to first before resorting to the IMF," he said, such as repricing Egypt's gas export agreements, re-examining the use of special government funds, and collecting tax arrears.

The Brotherhood estimates it won about 41 percent of the seats in elections to the lower house of parliament that are now drawing to a close, making it by far the most powerful political force in the house. So its backing may be needed to keep any IMF deal on track after June, when the military has pledged to hand over power; the IMF has said an aid agreement must have "broad political support" in Egypt.

The IMF said discussions would begin in Cairo on Sunday and a source at the Fund said they would explore the possibility of a $3 billion loan. Last June, the government rejected the offer of an IMF facility of that size.

IMF aid is sensitive in Egypt because of national pride and because the Fund is expected to ask the government for assurances on curbing state spending - an explosive issue in a country where frustration over poverty has been causing unrest.

Badr El-Din, a member of parliament who was jailed three times because of his political activities under Mubarak's rule, said the Brotherhood had not been discussing the possibility of IMF aid with the government, and did not expect to be kept informed of progress in the talks with the Fund.   Continued...

A photographer takes pictures through a glass carrying the International Monetary Fund (IMF) logo during a news conference in Bucharest, Romania. March 25, 2009.     REUTERS/Bogdan Cristel
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