Egypt-IMF loan talks end without deal
WASHINGTON - Egypt and the International Monetary Fund failed to agree on terms for a $4.8 billion loan that could ease a worsening economic crisis in the Arab world's most populous nation.
After nearly two weeks of negotiations in Cairo, IMF mission chief Andreas Bauer, in a statement issued early on Tuesday, cited progress, notably in Egypt's efforts to better target fuel subsidies and broaden its revenue base.
"The mission made progress in the discussions with the Egyptian authorities on their economic program and possible financial support from the IMF," he said.
"The authorities have already taken valuable first steps to improve the targeting of energy subsidies and are seeking to broaden their revenue base.
"They intend to build on these steps with further actions to address, in a socially balanced way, the country's fiscal and balance of payments deficits, and create conditions for a sustained recovery of the economy."
Bauer also said the IMF group was encouraged by "the constructive positions and views" of representatives of political parties on economic reforms and a possible IMF loan program.
"All sides concurred on the need to protect the vulnerable sectors of society when implementing reform measures."
He said talks on the loan will continue.
Egyptian officials also played down the setback, saying talks would continue this week in Washington, and in Cairo after that, and the two sides were closing in on a deal.
"We are travelling to the spring meetings in the next two days and are going to be there in the coming week and will complete the negotiations there, and after we return, the mission will come again for us to complete some of the negotiations," Planning Minister Ashraf al-Arabi, one of the Egyptian negotiators, said in a television interview.
"But the talks are difficult," he told the privately owned CBC channel.
Analysts said the ruling Muslim Brotherhood did not want to risk unpopular measures that could hit poor and middle-income Egyptians before parliamentary elections expected from October.
Egyptian authorities have said the talks are about a $4.8 billion financing program that would require considerable reforms.
But concluding the deal has been held up in part by the inability of the Egyptian government to build a consensus behind the program from various political groups.
Last Wednesday, Qatar announced that it would buy bonds from cash-strapped Egypt worth $3 billion, on top of a previously announced aid package, to help the government keep up with its obligations.