By TAREK EL-TABLAWY, AP Business Writer – Tue Feb 22, 2011
CAIRO – Egypt has asked Britain for its support in seeking debt forgiveness from Europe, the Finance Ministry said Tuesday, in the latest push to boost an economy bruised by almost three weeks of protests that toppled President Hosni Mubarak.
Finance Minister Samir Radwan also said in a statement that the current government's immediate priorities center on helping Egyptians directly affected by the 18 days of protests, as well as enacting quick measures that could boost the economy.
The 18 days of protests that led to Mubarak's ouster after nearly 30 years in power ravaged Egypt's economy, forcing banks to close, businesses to shutter and the stock market to halt operations. The bourse on Tuesday further postponed the resumption of trading until next week, but did not specify a date.
Radwan, in a meeting with British Trade and Investment Minister Lord Stephen Green on Monday, said he would like London's help in either securing debt forgiveness from Europe, or at least a forgiveness of the interest on the loans.
Egypt owes the EU member states about $9 billion, according to EU officials in Egypt. The country's total foreign debt stood at about $34.7 billion as of the end of September 2011, according to central bank figures. Government debt accounted for roughly $29.8 billion, or slightly more than 11 percent of GDP.
EU officials in Cairo said the Egyptian government had yet to submit a formal request for debt forgiveness to EU member states.
But European foreign ministers have already been discussing a comprehensive economic and trade package to help countries in North Africa that have been affected by the turmoil in Egypt, Tunisia and, most recently, Libya. EU foreign policy chief Catherine Ashton met with Egyptian Foreign Minister Ahmed Aboul Gheit on Tuesday to discuss the country's economic and political situation following Mubarak's ouster.
Ashton said the EU was studying ways to help Egypt transition to democracy, as well as steps the bloc could take to rebuild the Egyptian economy. She said Brussels could provide expertise and resources, but that it was up to Egyptians to determine the future of their country.
The calls came as the head of the European Investment Bank called on the EU to allow it offer more funds to support the transition to democracy in Tunisia, Egypt and other countries in the region. Philippe Maystadt said the EIB had used up the euro8.7 billion ($11.9 billion) it was allocated to lend to the region between 2008 and 2013 faster than expected.
The unrest in Egypt shattered earlier projections of the country's economy growing by as much as 6 percent in fiscal year 2010-2011. The government has cut its forecast for GDP growth by almost one half, while analysts and economists have offered estimates ranging from about 1.7 percent to slightly more than 3 percent for the year.
Cairo-based Mideast investment bank EFG-Hermes said it was projecting a contraction of 2.5 percent for calendar year 2011, in a reflection that the economic spasms in the country will likely extend well through the end of the year.
The government has estimated that the unrest cost the nation about $1.7 billion in the span of about two weeks, with more than half that figure stemming from tourism losses.
Officials have said more than 210,000 tourists fled the country in the last week of January and the first few days of February. National carrier EgyptAir is offering 25 of its latest aircraft for lease, complete with crew and the company said it has lost about 80 percent of its projected revenue so far this year amid steep drop in passenger demand.