Obama's speech might include Egypt debt cancellation: WSJ

Salma El-Wardani , Wednesday 18 May 2011

US officials say measures to be announced on Thursday will be far bolder than previous economic assistance to the region

President Barack Obama waving at the audience, after delivering a speech at Cairo University in Cairo, Egypt, 2009(AP Photo/Nasser Nasser, File)

President Barack Obama is expected to announce a new aid plan for the Middle East and North Africa in a State Department speech scheduled for Thursday, a report published today by the Wall Street Journal reveals. 

US officials say the measures to be announced will be far bolder than previous American economic assistance to the region.

"Mr. Obama will outline the plan, which could include debt cancellation and a reprogramming of financial aid the US already provides to countries like Egypt," the article says. "The administration is looking at a mixture of direct aid, debt relief, and export credits to help stabilize Egypt's finances."

"There are a whole range of tools we could use," the Wall Street Journal quoted a US official as saying. "We've been looking for the right mix."

Obama is expected to deliver a speech on the events in the Middle East and North Africa and US policy towards them on Thursday 19 May at 5:40pm Cairo time, according to the official website of the US embassy in Cairo.

Ahram Online was unable to reach the US embassy for comment.

An Egyptian financial delegation, headed by Egypt's Minister of International Cooperation, Fayza Abul Naga, Minister of Finance, Samir Radwan, and the governor of the Central Bank of Egypt, Farouk El-Oqda, visited Washington DC last month to discuss the possibility of debt relief.

Congress was divided on how to deal with the issue, said insiders.

“It’s very hard timing for Washington to respond to the Egyptian request because of the current debate in America about the budget deficit and applying austerity policies,” said Dianne Feinstein, chairman of the Senate Intelligence Committee, during the visit.

“It’s unlikely that the Senate and Congress will approve dropping Egypt’s debt before the next legislatives in September and before they see how far the country has shifted towards democracy,” said Republican senator Richard Lugar.

However Democratic congressman Gary Ackerman said he backed the immediate alleviation of Egyptian debts because of the rapid progress Egypt had already made.

“The approval of Congress to drop Egypt’s debt will encourage European countries to settle other Egyptian debts,” said Ackerman.

He asked Congress members to consider Egypt’s debt alleviation a "Marshall plan for the country", putting it on the road to democracy as he says US aid helped Europe in the wake of World War 2.

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