Egyptian delegation in Washington pushes for $3.3 billion debt relief

Ahram Online, Wednesday 13 Apr 2011

Ministers will present case for clearing debts to Congress but insiders say US decision likely to be postponed until after Egypt's first democratic elections

Fayza

An Egyptian financial delegation is in Washington DC to discuss the possibility of debt relief.

The delegation is 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.

The three will hold discussions with members of Congress on 14 and 15 April in an effort to convince them to clear the US$3.3 billion Egypt currently owes the US.

Congress is divided on how to deal with the issue.

“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,” says Dianne Feinstein, chairman of the Senate Intelligence Committee.

However, she adds that America realises the importance of supporting Egypt in its transition towards democracy and wants to help as much as it can.

“We understand how important it is to stand side by side with Egypt in this phase but the financial situation in Washington is hard,” says Senator Bob Casey.

Fayza Abul Naga will have an open discussion with the members of the Foreign Affairs Committee.

The Senate and Congress are expected to vote on new American aid packages for Egypt by the end of the week. Proposed funding includes $1.3 billion in military and $250 million in economic aid. The largest share of economic aid will be used to finance civil society organisations to assist the process of democratic transition.

The US Secretary of State Hillary Clinton is scheduled to present a report in 45 days on Egypt's progress in the transition from a military regime to a civil and democratic one.

“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,” says Republican senator Richard Lugar.

He says Congress will want to see the first civilian-elected government in Egypt ready to deliver a budget and bear financial responsibilities before the US approves any debt alleviation.

Democratic congressman Gary Ackerman said he backs the immediate alleviation of Egyptian debts because of the rapid progress Egypt has already made.

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

He has 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.

Short link: