UK insider reveals all over Egypt's IMF loan
A well-positioned UK official close to the negotiations between the IMF and Egypt over a $4.8 billion loan deal reveals to Ahram Online that "The IMF wants economic reforms before it gives the money."
Although the UK government agrees with the IMF conditions, it also believes it will not be easy for the Egyptian government to accept the loan's terms.
The UK government expressed it is willing to help accelerate the talks if Egypt will respond to the international financial institution's demands.
The anonymous government worker also says the UK has been pushing Egypt to take the negotiations with the IMF on the loan forward.
"We have some influence in some international institutions. So, we can help push the process in a diplomatic sense, but the IMF ... should make sure that Egypt implemented reforms.
"If you are going to lend someone a lot of money, you are going to make sure that they will be able to pay it back to you, essentially," the official explained.
The conditions are no doubtedly tough for Egypt. In fact, the now-dissolved People’s Assembly (lower house of parliament) and other political groups rejected it, which is one reason why Egyptian president Mohammad Morsi is hesitant in signing. The negotiations also began before Morsi came to power in June.
"The negotiations are very slow because it is very difficult for the Egyptian authorities to be happy with conditions requested," said the official.
"He [Morsi] is correct in looking it over cautiously because he is aware that it will be very tough for Egypt [to accept the reforms needed] in the current climate," the official admitted.
Egypt seeks a deal on a $4.8 billion loan from the IMF help face its financial and economic difficulties after the January 25, 2011 revolution.
An IMF delegation has been in Cairo since last week. It extended its stay for a few days, saying it is having constructive consultations with the government on the deal - which some financial experts see as crucial to restore international investors’ confidence in the Egyptian economy.
"I am sure the Egyptian authorities will not be fully happy with what the IMF is asking, but these are its terms and conditions," the UK official added.
He warned that "the situation will be even worse if the IMF poured money in and this money disappeared down in the drain."
The IMF expressed it wishes to see Egypt as a place with a stable economy where jobs are being created.
However, the UK official reiterated that to achieve such aim "The IMF is realistic about the conditions needed."
- Malnourished economy: global hunger leading to $2 trillion loss in world GDP
- Going green: UAE looks to save Dh6.98b a year by 2030 with renewable energy
- Diversify and dump the slump in the GCC
- Supervising the stoners: Egyptian tobacco traders call for the legalization of cannabis
- Frozen: Arab Spring economies barely trading with one another
- Energy subsidy reform not stalling Egypt's IMF deal - Minister
- Damned or courageous? An inside look into Ethiopia's decision to thwart Egypt and build the Nile dam all by itself
- Iraq strife could trigger higher oil prices - IMF’s Lagarde
- IMF will leave that currency alone, says Egypt's Finance Minister