Tag Archives: IMF

Egypt's pound slips further against dollar

The Egyptian pound slipped further against the dollar on Monday, a downward plunge on the first two days of trading under a new system, as the president tried to assure a worried public that the crisis atmosphere will end soon.

The pound slid nearly 1 percent on Monday from the previous day, bringing the exchange rate at banks to 6.42 pounds to the dollar. It marked a cumulative loss of nearly 4 percent this week, after Egypt‘s central bank took steps in what bankers believe is an attempt to control the devaluation of the currency.

In an effort to instill confidence among people who have been rushing to sell Egyptian pounds for dollars, President Mohammed Morsi said the pound’s fall “does not worry or scare us, and matters will balance out within a matter of days.”

His remarks to Arab journalists, carried by the official news agency MENA, come as Egypt grapples with a crippling deficit that the planning minister said Monday is likely to reach 200 billion Egyptian pounds ($31.5 billion) by mid-2013.

Monday’s slide of the Egyptian pound came on the second day of trading under a new dollar auction system aimed at regulating the devaluation.

The Central Bank of Egypt sold $75 million on Monday for the second straight day under the new system, according to state news media.

Under the auction, banks bid for dollars and know how much the central bank is selling that day. In the past, the banks used to buy through two private intermediary banks, according to a banker familiar with the trades.

He said that not all of the banks that submitted requests to trade were approved. Banks that joined the auction received just 66 percent of what they were bidding on, he said, speaking on condition of anonymity because he was not authorized to speak to reporters — indicating continued pressure on the pound.

The bank appears to be trying to avert a sharp devaluation of the Egyptian currency in a nation where half of its 85 million people live just at or below the poverty line of $2 per person a day.

Foreign reserves have fallen to around $15 billion from $36 billion in January 2011, before the uprising that toppled Hosni Mubarak and the political turmoil that followed, which battered key foreign currency earners such as tourism and foreign investment.

To boost investor confidence and the country’s foreign reserves, Egypt is negotiating a series of large loans.

Egypt has requested a $4.8 billion loan from the International Monetary Fund. The loan has been delayed because of political turmoil over Egypt‘s new constitution, approved in a referendum this month.

Egypt is also in talks for a $900 million loan from the European Union, $500 million from the African Development Bank and $450 million from the United States. It has already received transfers from Qatar that have propped up its reserves and is expecting another $2 billion from the oil-rich Gulf country. It is finalizing talks for $1 billion from Turkey, according to Planning Minister Ashraf el-Arabi.

Economists estimate that the Egyptian pound is overvalued. They believe the current devaluation and planned austerity measures to cut subsidies and raise taxes are part of a package of conditions put forth by the IMF. Neither party has confirmed the contents of the proposed deal.

Now that the new constitution has been approved, the government has again turned its attention to economic reforms that are likely to include wide-ranging tax hikes.

An IMF official told The Associated Press in an email that they are in “continuous contact” with Egyptian authorities and “look forward to learn about the status of the government‘s economic program.” The official spoke on condition of anonymity in line with the organization’s regulations.

Source: Fox World News

Egypt to resume talks with IMF in January

Egypt‘s prime minister says his country will resume talks in January with the International Monetary Fund over a $4.8 billion loan, after they were suspended during this month’s political turmoil over the now-adopted constitution.

Egypt is grappling with a crippling budget deficit and dwindling foreign reserves. The government hopes the loan will attract needed foreign investment.

Talks with the IMF were derailed amid large rallies organized by opponents of the constitution. The protests turned violent, leaving at least 10 dead.

The government suspended the talks which would have resulted in austerity measures, surely to add to public discontent.

On Sunday, Prime Minister Hesham Kandil said his government will start a public discussion of the plan and hopes that there will be “no drastic changes.”

Source: Fox World News

Amid political uncertainty, economic fear in Egypt leads to hoarding dollars

As Egypt prepared to release official results of the divisive constitutional referendum on Tuesday, the country edged deeper into economic crisis with some worried residents hoarding dollars for fear that the local currency could weaken significantly.

The anxiety over the economy was visible at currency exchanges in the upscale Cairo neighborhood of Zamalek, which ran out of dollars by midday and offered only euros — a rare occurrence. Some banks, too, said they had run out of cash dollars, forcing people to seek foreign currency from exchanges around the city.

“I asked around in many exchange places and can’t find dollars anywhere,” said Cairo resident Mahmoud Kamel after unsuccessfully visiting one exchange office in Zamalek. “I want to exchange money because I’m afraid the Egyptian pound will not have any value soon.”

Both political instability and economic fundamentals are playing a role in Egypt‘s growing financial distress. A constitution drafted by Islamist allies of President Mohammed Morsi deeply polarized the country and sparked huge street demonstrations that at times exploded into deadly violence. According to unofficial results the constitution passed in a referendum over the past two weekends with a 64 percent “yes” vote.

The official result due out later Tuesday is expected to confirm the unofficial tallies.

The dash to sell Egyptian pounds for dollars prompted the Central Bank of Egypt to issue a statement on Monday calling on banks not to listen to rumors circulating about the fiscal health of the nation.

In a statement carried on official news websites, the bank declared its commitment to guarantee all deposits in local and foreign currencies to banks in Egypt and said banks are “financially strong enough and have stable liquidity to ensure the fulfillment of any obligations toward all its clients.”

There was one particularly nerve-rattling report in recent days that longtime Central Bank Governor Farouk Okdah had resigned. The report came on Saturday during the second and final round of voting on the constitutional referendum.

Official media quickly retracted the news after reporting it. The governor then turned up at a meeting of the government‘s economic team on Sunday in an apparent attempt to quell nervousness over the state of the economy.

Egypt‘s currency had been stable trading around 6 pounds to the dollar for the first half of the year. It has since slipped, especially in the past two months as political instability worsened. The Central Bank of Egypt said Tuesday that the dollar was selling at 6.18 to the Egyptian pound. To buy dollars at currency exchanges, the rate was 6.20.

Since Egypt‘s uprising nearly two years ago, the country has lost more than half of its foreign currency reserves from $36 billion in 2010 to around $15 billion currently. The reserve level has been slightly propped up by some Qatari deposits in past months.

Underlining the cash shortage, unofficial estimates put Egypt‘s reserves at just around $4 billion in hard currency, with the rest in gold and dollar treasury bills for the local market.

Major foreign currency earners, such as foreign direct investment and tourism, have dropped off because of political unrest and deterioration in security following Hosni Mubarak‘s ouster in February 2011.

Egypt has requested a $4.8 billion loan from the International Monetary Fund to bridge the burgeoning budget deficit, but talks largely stalled this month after mass protests turned violent over disputes around the draft constitution.

Economic experts say that Egypt‘s current foreign reserves barely cover three months of imports, which is the IMF‘s minimum recommended coverage.

In another blow, Standard & Poors downgraded Egypt‘s long-term credit rating by one notch to B-, six steps below investment grade.

One of biggest problems facing the market, according to those experts, is a lack of transparency on the part of President Mohammed Morsi‘s government.

“The economy is a reflection of the political unrest,” said Khaled Abdel-Hamid, head of Treasury at Union National Bank of the UAE in Egypt. “We need transparency. The people have to know the real position of the economy in Egypt.”

He predicted in 2013, the pound will continue to devalue and inflation rates will rise, affecting the price of food and basic commodities.

“What matters is the end result. People want to live. If people can’t find food or security, what does it mean if there is a president or constitution?” Abdel-Hamid said.

Egyptian Prime Minister Hesham Kandil said Tuesday that his government was focused on luring foreign investors back Egypt, supporting the foreign reserves and plugging the budget deficit.

“Dealing with the budget deficit and raising the growth rate is a priority for the government to raise employment rates, reduce inflation levels and increase Egyptian exports’ competition abroad,” he said.

Leading civil society and rights groups have protested against the IMF deal, saying that the government has not released the terms of the agreement being worked out. Rumors swirling around impending tax hikes, subsidy cuts and other bread-and-butter issues have heightened the public’s concern. Around 40 percent of Egyptians live just at or below the poverty line of surviving on around $2 a day.

Promises by Morsi and his Muslim Brotherhood group that the Islamist-drafted constitution would bring about the stability Egyptians crave were dismissed by economic experts who warned that without enough currency reserves, there is little to stop the pound from falling steeply in value.

“If anything, we were stable. We are still entering the period of instability,” said Haytham Abdel Fattah, head of the Treasury and International Markets Manager at Industrial Development Bank. “The instability of the foreign exchange rate is not at all detached from the political instability. It is a reflection and clear mirror to what is happening,” he added.

Tens of thousands of Egyptians protested ahead of the referendum on the charter to demand a new and more diverse assembly to draft the constitution. Instead, the Islamist-dominated assembly hurriedly passed it before a court could rule on the panel’s legitimacy. Morsi issued decrees, later rescinded, that gave him near-absolute powers to push the constitution to a nationwide vote.

Backers of the Brotherhood and others Islamist parties also rallied in support of the charter, leaving the country split and leading to violent clashes between the two camps on Dec. 5 that killed 10 outside the presidential palace in Cairo this month. The turmoil rocked Egypt‘s stock market, delayed the IMF loan talks and hurt the country’s peak tourism season.

Source: Fox World News

Egypt fears over currency lead to dollar rush

As Egypt prepared to release official results of the divisive constitutional referendum on Tuesday, the country edged deeper into economic crisis with some worried residents hoarding dollars for fear that the local currency could weaken significantly.

The anxiety over the economy was visible at currency exchanges in the upscale Cairo neighborhood of Zamalek, which ran out of dollars by midday and offered only euros — a rare occurrence. Some banks, too, said they had run out of cash dollars, forcing people to seek foreign currency from exchanges around the city.

“I asked around in many exchange places and can’t find dollars anywhere,” said Cairo resident Mahmoud Kamel after unsuccessfully visiting one exchange office in Zamalek. “I want to exchange money because I’m afraid the Egyptian pound will not have any value soon.”

Both political instability and economic fundamentals are playing a role in Egypt‘s growing financial distress. A constitution drafted by Islamist allies of President Mohammed Morsi deeply polarized the country and sparked huge street demonstrations that at times exploded into deadly violence. According to unofficial results the constitution passed in a referendum over the past two weekends with a 64 percent “yes” vote.

The official result due out later Tuesday is expected to confirm the unofficial tallies.

The dash to sell Egyptian pounds for dollars prompted the Central Bank of Egypt to issue a statement on Monday calling on banks not to listen to rumors circulating about the fiscal health of the nation.

In a statement carried on official news websites, the bank declared its commitment to guarantee all deposits in local and foreign currencies to banks in Egypt and said banks are “financially strong enough and have stable liquidity to ensure the fulfillment of any obligations toward all its clients.”

There was one particularly nerve-rattling report in recent days that longtime Central Bank Governor Farouk Okdah had resigned. The report came on Saturday during the second and final round of voting on the constitutional referendum.

Official media quickly retracted the news after reporting it. The governor then turned up at a meeting of the government‘s economic team on Sunday in an apparent attempt to quell nervousness over the state of the economy.

Egypt‘s currency had been stable trading around 6 pounds to the dollar for the first half of the year. It has since slipped, especially in the past two months as political instability worsened. The Central Bank of Egypt said Tuesday that the dollar was selling at 6.18 to the Egyptian pound. To buy dollars at currency exchanges, the rate was 6.20.

Since Egypt‘s uprising nearly two years ago, the country has lost more than half of its foreign currency reserves from $36 billion in 2010 to around $15 billion currently. The reserve level has been slightly propped up by some Qatari deposits in past months.

Underlining the cash shortage, unofficial estimates put Egypt‘s reserves at just around $4 billion in hard currency, with the rest in gold and dollar treasury bills for the local market.

Major foreign currency earners, such as foreign direct investment and tourism, have dropped off because of political unrest and deterioration in security following Hosni Mubarak‘s ouster in February 2011.

Egypt has requested a $4.8 billion loan from the International Monetary Fund to bridge the burgeoning budget deficit, but talks largely stalled this month after mass protests turned violent over disputes around the draft constitution.

Economic experts say that Egypt‘s current foreign reserves barely cover three months of imports, which is the IMF‘s minimum recommended coverage.

In another blow, Standard & Poors downgraded Egypt‘s long-term credit rating by one notch to B-, six steps below investment grade.

One of biggest problems facing the market, according to those experts, is a lack of transparency on the part of President Mohammed Morsi‘s government.

“The economy is a reflection of the political unrest,” said Khaled Abdel-Hamid, head of Treasury at Union National Bank of the UAE in Egypt. “We need transparency. The people have to know the real position of the economy in Egypt.”

He predicted in 2013, the pound will continue to devalue and inflation rates will rise, affecting the price of food and basic commodities.

“What matters is the end result. People want to live. If people can’t find food or security, what does it mean if there is a president or constitution?” Abdel-Hamid said.

Egyptian Prime Minister Hesham Kandil said Tuesday that his government was focused on luring foreign investors back Egypt, supporting the foreign reserves and plugging the budget deficit.

“Dealing with the budget deficit and raising the growth rate is a priority for the government to raise employment rates, reduce inflation levels and increase Egyptian exports’ competition abroad,” he said.

Leading civil society and rights groups have protested against the IMF deal, saying that the government has not released the terms of the agreement being worked out. Rumors swirling around impending tax hikes, subsidy cuts and other bread-and-butter issues have heightened the public’s concern. Around 40 percent of Egyptians live just at or below the poverty line of surviving on around $2 a day.

Promises by Morsi and his Muslim Brotherhood group that the Islamist-drafted constitution would bring about the stability Egyptians crave were dismissed by economic experts who warned that without enough currency reserves, there is little to stop the pound from falling steeply in value.

“If anything, we were stable. We are still entering the period of instability,” said Haytham Abdel Fattah, head of the Treasury and International Markets Manager at Industrial Development Bank. “The instability of the foreign exchange rate is not at all detached from the political instability. It is a reflection and clear mirror to what is happening,” he added.

Tens of thousands of Egyptians protested ahead of the referendum on the charter to demand a new and more diverse assembly to draft the constitution. Instead, the Islamist-dominated assembly hurriedly passed it before a court could rule on the panel’s legitimacy. Morsi issued decrees, later rescinded, that gave him near-absolute powers to push the constitution to a nationwide vote.

Backers of the Brotherhood and others Islamist parties also rallied in support of the charter, leaving the country split and leading to violent clashes between the two camps on Dec. 5 that killed 10 outside the presidential palace in Cairo this month. The turmoil rocked Egypt‘s stock market, delayed the IMF loan talks and hurt the country’s peak tourism season.

Source: Fox World News

Egyptians vote on Islamist-backed constitution

Egyptians voted on Saturday in the second and final phase of a referendum on an Islamist-backed constitution that has polarized the nation, with little indication that the expected passage of the charter will end the political crisis in which the country is mired.

Islamist President Mohammed Morsi is likely to emerge from a bruising month-long battle with a narrow victory for the constitution he and his Islamist allies sought. But it has been at the cost of alienating many who had backed him, leaving an administration he has long tried to depict as broad-based even more reliant on the Muslim Brotherhood and other Islamists.

The liberal and secular opposition, in turn, has ridden a wave of anger among a significant part of the population against Morsi and the Brotherhood, who many feel are establishing a lock on power. But it has been unable to block a charter critics fear will bring greater implementation of Islamic law and it now faces the question of how to confront Morsi now.

Morsi faced more bleeding from his administration. Hours before polls closed, Morsi’s vice president, Mahmoud Mekki, announced his resignation.

Shortly afterward, state TV reported the resignation of Central Bank Governor Farouq el-Oqdah. But then it carried a denial by the Cabinet that he had stepped down. No explanation was given for the conflicting reports, which come after several days of media report that the administration was trying to convince el-Oqdah not to quit his post, at a time when Egypt‘s pound has been losing value and a crucial deal for a much needed IMF loan of $4.8 billion has been postponed.

Mekki’s move was in part expected since the new charter would eliminate the vice presidency post. But Mekki hinted that the hurried departure could be linked to Morsi’s policies.

“I have realized a while ago that the nature of politics don’t suit my professional background as a judge,” his resignation letter, read on state TV, said. He said he had first submitted his resignation last month but events forced him to stay on.

Over the past month, seven of Morsi’s 17 top advisers and the one Christian among his top four aides resigned. Like Mekki, they said they had never been consulted in advance on any of the president’s moves, including Nov. 22 decrees placing him above any oversight and granting himself near absolute powers.

Saturday’s vote is taking place in 17 of Egypt‘s 27 provinces with about 25 million eligible voters. The first phase on Dec. 15 produced a “yes” majority of about 56 percent with a turnout of some 32 percent, according to preliminary results.

Preliminary results for the second round are expected late Saturday or early Sunday. The charter is expected to pass, but a low turnout or relatively low “yes” vote could undermine perceptions of its legitimacy. There was no immediate word on Saturday’s turnout, but in some places lines were short or non-existent.

For some, the vote was effectively a referendum on Morsi himself, who opponents accuse of turning the government into a monopoly for the Muslim Brotherhood.

In the village of Ikhsas in the Giza countryside south of Cairo, buses ferried women voters to the polling centers in an effort villagers said was by the Muslim Brotherhood.

An elderly man who voted “no” screamed in the polling station that the charter is “a Brotherhood constitution.”

“We want a constitution in the interest of Egypt. We want a constitution that serves everyone, not just the Brotherhood. They can’t keep fooling the people,” 68-year-old Ali Hassan, wearing traditional robes, said.

But others were drawn by the hope that a constitution would finally bring some stability after nearly two years of tumultuous transitional politics following Egypt‘s 2011 revolution that removed autocrat Hosni Mubarak. Though few fault-lines in Egypt are black and white, there appeared to be an economic split in voting, with many of the middle and upper classes rejecting the charter and the poor voting “yes.”

In Ikhsas, Hassan Kamel, a 49-year-old day worker, said “We the poor will pay the price” of a no vote.

He dismissed the opposition leadership as elite and out of touch. “Show me an office for any of those parties that say no here in Ikhsas or south of Cairo. They are not connecting with people.”

As was the case in last week’s vote, opposition and rights activists reported numerous irregularities: polling stations opening later than scheduled, Islamists outside stations trying to influence voters to say “yes,” and independent monitors denied access.

For the past four weeks, both the opposition and the Islamists have brought giant crowds out into the streets in rallies — first over Morsi’s grab of new powers, though they were since revoked, and then over the charter itself, which was finalized by a Constituent Assembly made up almost entirely of Islamists amid a boycott by liberal and Christian members.

The rallies and protests repeatedly turned in to clashes, killing at least 10 people and wounding more than 1,000. The most recent came on the eve of Saturday’s voting, when Islamists and Morsi opponents battled each other for hours with stones in the Mediterranean city of Alexandria.

The promise of stability even drew one Christian woman in Fayoum, south of Cairo, to vote “yes” — a break with most Christians nationwide who oppose the draft. Hanaa Zaki said she wanted an end to Egypt‘s deepening economic woes.

“I have a son who didn’t get paid for the past six months. We have been in this crisis for so long and we are fed up,” said Zaki, waiting in line along with bearded Muslim men and Muslim women wearing headscarves in Fayoum, a province that is home to both a large Christian community and a strong Islamist movement.

In Giza’s upscale Mohandiseen neighborhood, a group of 12 women speaking to each other in a mix of French, Arabic and English said they all intended to vote “no.”

“My friends are Muslim and are voting `no.’ It’s not about Christian versus Muslim, but it is Muslim Brotherhood versus everyone else,” said one of them, Shahira Sadeq, a Christian physician.

Kamla el-Tantawi, 65, said she voted no “against what I’m seeing” — and she gestured at a woman nearby wearing the full-face veil known as niqab, a hallmark of ultraconservative Muslim women.

“I lose sleep thinking about my grandchildren and their future. They never saw the beautiful Egypt we did,” she said, harkening back to a time decades ago when few women even wore headscarves covering their hair, much less the black niqab that blankets the entire body and leaves only the eyes visible.

In the neighboring, poorer district of Imbaba, Zeinab Khalil — a mother of three who wears the niqab — was backing the charter.

“Morsi, God willing, will be better than those who came before him,” she said. “A `yes’ vote moves the country forward. We want things to calm down, more jobs and better education.”

The voices reflected the multiple concerns that have been shaking Egypt for weeks. For some, the dispute has been about Shariah and greater religion in public life — whether to bring it about or block it. In many areas, clerics have been preaching in favor of the charter in their sermon.

But the dispute has also been about political power. An opposition made up of liberals, leftists, secular Egyptians and a swath of the public angered over Morsi’s 5-month-old rule fear that Islamists are creating a new Mubarak-style autocracy.

Morsi’s allies say the opposition is trying to use the streets to overturn their victories at the ballot box over the past two years. They also accuse the opposition of carrying out a conspiracy by former members of Mubarak’s regime to regain power.

Many voters were under no illusions the turmoil would end.

“I don’t trust the Brotherhood anymore and I don’t trust the opposition either. We are forgotten, the most miserable and the first to suffer,” said Azouz Ayesh, sitting with his neighbors as their cattle grazed in a nearby field in the Fayoum countryside.

He said a yes would bring stability and a no would mean no stability. But, he added, “I will vote against this constitution.”

In Ikhsas village, Marianna Abdel-Messieh, a Christian, was the only woman not wearing a head scarf in the women’s line outside a polling center. She was voting “no,” but expected that whatever the result, Egypt would see more rule by Shariah.

“So, whether this constitution passes or not, there will be trouble,” she said. “God have mercy on us.”

Source: Fox World News

Egypt's central bank governor quits

State television says Egypt‘s central bank governor has resigned.

Farouq el-Oqdah’s resignation is the second such high profile move on Saturday. Earlier on the day, Vice President Mahmoud Mekki resigned, saying he realized that politics did not suit his professional background as a judge.

The brief TV report did not say why el-Oqdah quit, but it ends days of media speculations about his intentions. Islamist President Mohammed Morsi and his Prime Minister Hesham Kandil met with el-Oqdah earlier this week in what media reports said was an attempt to dissuade him from leaving.

His departure comes at a time when Egypt‘s pound has been losing value against the U.S. dollar and the postponement of a deal with the IMF for a much needed loan of $4.8 billion.

Source: Fox World News

IMF urges full EU banking union to counter crisis

The International Monetary Fund is urging the European Union to move swiftly toward a fully integrated banking sector to stabilize the bloc’s financial system.

The IMF said Thursday the 27-member group still faces great challenges “with continuing banking and sovereign debt crises” which require a region-wide solution because of its heavily interconnected banks.

In its first financial stability assessment for the 27-nation bloc, the IMF welcomed this month’s EU decision to create a single banking supervisor as “an initial step” but stresses further measures such as a joint deposit guarantee and a joint bank bailout fund are needed.

European policymakers are reluctant to create a full banking union because joint liability implies one country’s taxpayers would someday have to bail out struggling banks of another EU country.

Source: Fox World News

Egyptian army takes over security ahead of vote

The Egyptian military on Monday assumed joint responsibility with the police for security and protecting state institutions until the results of a Dec. 15 constitutional referendum are announced.

The army took up the task in line with a decree issued Sunday by President Mohammed Morsi. The Islamist leader on Monday also suspended a series of tax hikes announced the previous day on alcohol, cigarettes and other items.

The presidential edict orders the military and police to jointly maintain security in the run-up to Saturday’s vote on the disputed charter, which was hurriedly approved last month by a panel dominated by the president’s Islamist allies despite a boycott of the committee’s liberal, secular and Christian members.

The decree also grants the military the right to arrest civilians, but presidential spokesman Yasser Ali said it was nowhere near a declaration of martial law.

“It is merely a measure to extend legal cover for the armed forces while they are used to maintain security,” Ali told The Associated Press.

There were no signs of a beefed up military presence outside the presidential palace, the site of fierce street clashes last week, or elsewhere in the capital on Monday.

Still, Morsi’s decision to lean on the military to safeguard the vote is widely seen as evidence of just how jittery the government is about the referendum on the draft constitution, which has been at the heart of days of dueling protests by the opposition and Morsi’s Muslim Brotherhood backers. The two sides clashed in Cairo last week, leaving at least six people dead and hundreds wounded in the worst violence of the crisis.

Both the opposition and Morsi’s supporters have called for mass rallies on Tuesday.

The opposition has rejected the referendum, but has yet to call for a boycott or instead a “no” vote at the polls.

“A decision on whether we call for a boycott of the referendum or campaign for a `no’ vote remains under discussion,” Hossam Moanis, a spokesman for the National Salvation Front grouping opposition parties and groups told the AP on Monday. “For now, we reject the referendum as part of our rejection of the draft constitution.”

The military last week sent out several tanks and armored vehicles in the vicinity of the presidential palace in Cairo following protests there by tens of thousands of Morsi’s critics. It was the first high-profile deployment by the military since it handed power in June to Morsi, Egypt‘s first freely elected president.

Morsi on Saturday rescinded decrees issued Nov. 22 granting him near absolute powers and placing him above any oversight, including by the courts. He has, however, insisted that the referendum will go ahead on schedule.

Judges have gone on strike to protest Morsi’s perceived “assault” on the judiciary and have said they would not oversee the Dec. 15 vote as is customary for judges in Egypt. Judges of the nation’s administrative courts announced Monday they were conditionally lifting their boycott of the vote, but they said their supervision of the process was conditional on bringing an end to the siege of the Supreme Constitutional Court by Morsi’s supporters.

In exchange for their supervision, they also demanded assurances that authorities would crack down on vote canvassing outside polling stations and offer life insurance policies to the judges.

Morsi’s deputy, Mahmoud Mekki, has said the vote could be staggered over several days if there were not enough judges to oversee the referendum.

The court was widely expected to dissolve the panel that drafted the constitution in a session scheduled for Dec. 2. The siege of the Nile-side building in Cairo’s Maadi district began Dec. 1.

In a surprise move, Morsi on Monday rescinded a series of decrees issued the previous day to raise taxes on a wide range of items and services, including alcohol, cigarettes, mobile phones, services offered by hotels and bank loans.

The state-owned daily Al-Ahram said the Sunday decrees to raise taxes were issued by Morsi. On Monday, the official MENA news agency carried a statement from Morsi’s office saying the president has decided to “suspend” the tax increases.

“The president does accept that citizens shoulder any additional burdens except by choice,” the statement said. Morsi, it added, has ordered a public debate on the increases to gauge popular reaction.

“The people will always have the loudest voice and final decision,” it added.

It was not immediately clear why Morsi changed his mind about the tax hikes in a matter of hours, but the about-face appeared to have more to do with inexperience rather than a bid by the president to appear sympathetic with the majority of Egyptians who struggle daily to make end meet as the economy’s woes deepen. A popular backlash against tax hikes could hurt the chances of the Morsi-backed draft constitution being ratified in the referendum.

Egypt and the IMF last month have reached an initial agreement for a $4.8 billion loan to revive the country’s ailing economy. The deal, agreed after nearly three weeks of negotiations in Cairo, will support the government‘s economic program for 22 months, the IMF said in a statement.

Egyptian authorities said at the time that it intended to raise revenues through tax reform, using the resources generated from new taxes to boost social spending and investment in new infrastructure.
Source: Fox World News

NYC suit against Strauss-Kahn could end in deal

Her side said she was seeking justice after prosecutors gave up on her sexual assault case. His said she slandered him in a grab for money. But a hotel housekeeper’s lawsuit against former International Monetary Fund leader Dominique Strauss-Kahn may soon end without public vindication for either of them. The maid, Nafissatou Diallo, is expected to be there, but Strauss-Kahn is not, when lawyers for both meet for a key court date at 2 p.m. Monday to update a judge on the status of settlement discussions. If a deal is inked, it could be simply the product of a meeting of financial motives — getting compensated for an alleged wrong versus avoiding further legal expenses and the uncertainty of a trial. It might be fueled by legal calculus in a case with two key figures who could face uncomfortable questions on a witness stand, or by personal desires to move on. Or all of the above. “There are a lot of factors that go into why someone settles a case when they do, and it really comes down to, in large part, the appetite that litigants have for being in litigation,” said Stuart Slotnick, a New York lawyer whose recent work includes representing American Apparel CEO Dov Charney in a sexual harassment case filed by an employee. “There are people whose lives are disrupted by virtue of the fact that they know they are being sued or are involved in litigation.” Strauss-Kahn’s lawyers acknowledged late last month there had been settlement talks, though they dismissed as “flatly false” a French newspaper report that Strauss-Kahn had agreed to pay $6 million. Diallo’s lawyers have declined to comment. Both Diallo’s and Strauss-Kahn’s lives have been upended since the day in May 2011 that she reported he forced her to perform oral sex and tried to rape her after she went to clean his room. He said the encounter was consensual. Diallo, 33, a Guinean immigrant and widowed mother of a teenage girl, was whisked into protective custody with her daughter for weeks in a hotel. She hasn’t returned to the job she held for three years at the Sofitel New York; she is on workers’ compensation, the hotel chain says. Her lawyers have said Strauss-Kahn tore a ligament in her shoulder, which he disputes. Strauss-Kahn, 63, was arrested and charged with attempted rape and other crimes and resigned from his IMF job. He soon found himself recast from promising, if philandering, French presidential contender to transcontinental sexual suspect. Since Diallo came forward, other sexual assault and prostitution allegations have emerged against him. Though some were withdrawn or deemed too old for prosecutors to pursue, he faces aggravated pimping charges related to a suspected prostitution ring run from a French luxury hotel. He says he attended “libertine” gatherings but wasn’t aware anyone was paid for sex. A French court is due to rule Dec. 19 on his bid to get those charges thrown out. Adding further turmoil to his personal life, Strauss-Kahn and his wife, journalist Ann Sinclair, have separated. Strauss-Kahn has been trying to rebuild his professional stature by giving speeches at international conferences and reportedly setting up a consulting company in Paris. Manhattan prosecutors dropped their case against Strauss-Kahn in August 2011, saying they had developed doubts about Diallo’s trustworthiness. They said she had wavered in recounting her movements after the alleged attack and lied to them about her past, including a convincing but fictitious story of being gang-raped before. She said she gave an honest account of her encounter with Strauss-Kahn, and her attorneys said her civil case would prove her right. “It didn’t happen with the DA, but we intend to vindicate Ms. Diallo’s rights,” one of her lawyers, Kenneth P. Thompson, said in March. Strauss-Kahn’s side was no less blunt. “We have maintained from the beginning that the motivation of Mr. Thompson and his client was to make money,” William W. Taylor III and other Strauss-Kahn attorneys said when Diallo sued in August 2011. Strauss-Kahn later filed a $1 million defamation suit against her. Neither case has come close to trial. Statistically, a settlement is no surprise. In a federal Bureau of Justice Statistics survey of nearly 440,000 state-court civil cases that were closed in 2005, only about 3 percent went to trial. The rest were settled, dropped or tossed out. And in Diallo’s case, a trial could have red flags for both sides. For Strauss-Kahn, it could mean a public dissection of his sexual history, since Diallo’s suit argued that their encounter reflected a pattern of misogynistic behavior, noted Paul F. Callan, a New York-based lawyer who represented Nicole Brown Simpson‘s relatives in their wrongful-death suit against O.J. Simpson. And Diallo would likely again have faced questions about her truthfulness. While the criminal case legally has no bearing on the lawsuit, Strauss-Kahn’s lawyers would be able to attack her credibility by drawing on the inconsistencies prosecutors raised, legal observers say. “When cases have serious problems on both sides, that’s when they settle,” Callan said. Women’s-rights advocates rallied to express support for Diallo after the criminal charges were dropped last year. Advocates deplore seeing women painted as gold-diggers for filing sexual assault suits, and settlements shouldn’t reinforce that image, said Sonia Ossorio, the president of the National Organization for Women’s New York City chapter. “It’s hard to come to that conclusion when you see what the ramifications of coming forward are to you in your community, and the detrimental effects it has on your professional life” in some cases, she said. The Associated Press generally does not name people who report being sexually assaulted unless they come forward publicly, which Diallo did. ___ Follow Jennifer Peltz at http://twitter.com/jennpeltz
Source: Fox US News