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Egypt receives Arab billions, names prime minister

by Yasmine Saleh and Tom Perry, Reuters

July 9, 2013 | 10:45 am

Members of the Muslim Brotherhood and supporters of ousted Egyptian President Mohamed Morsi in Nasr City, Egypt, on July 8. Photo by Mohamed Abd El Ghany/Reuters

Members of the Muslim Brotherhood and supporters of ousted Egyptian President Mohamed Morsi in Nasr City, Egypt, on July 8. Photo by Mohamed Abd El Ghany/Reuters

Egypt named an interim prime minister on Tuesday and rich Gulf states poured in $8 billion in aid, as the biggest Arab nation sought ways out of a crisis a day after troops killed dozens of Islamists.

Interim head of state Adli Mansour announced a faster-than-expected timetable to hold elections in about six months. Scorned by the ousted Muslim Brotherhood, he is under mounting pressure to plot a path back to democracy less than a week after the army overthrew the first freely elected president.

A day after 55 people were killed when troops opened fire on Brotherhood supporters, Hazem el-Beblawi, a liberal economist and former finance minister, was named interim prime minister. Former U.N. diplomat Mohamed ElBaradei, now a liberal party leader, was named deputy president for foreign affairs.

News quickly followed of $8 billion in grants, loans and fuel from Saudi Arabia and the United Arab Emirates.

Crucially, the choice of Beblawi won the acceptance of the ultra-orthodox Islamist Nour Party - sometime ally of toppled President Mohamed Morsi and his Brotherhood. Nour leaders have been courted by the military-backed interim authorities to prove that Islamists will not be marginalized by the new government.

Yet the worst day of violence in more than a year has left Egypt more divided than ever in its modern history. The Brotherhood is isolated and furious at Egyptians who passionately reject it.

The bloodshed has raised alarm among key donors such as the United States and the European Union, as well as in Israel, with which Egypt has had a U.S.-backed peace treaty since 1979.

Rich Gulf Arab states, long suspicious of the Muslim Brotherhood, have shown fewer reservations. The United Arab Emirates offered a grant of $1 billion and a loan of $2 billion. Saudi Arabia offered $3 billion in cash and loans, and an additional $2 billion worth of much-needed fuel.

In a further demonstration of its support, UAE Foreign Minister Abdullah bin Zayed visited Egypt on Tuesday, the most senior foreign official to arrive since Morsi's removal.

"EVEN IF THEY KILL US ALL"

The Brotherhood says Monday's violence was an unprovoked attack on worshippers holding peaceful dawn prayers outside a barracks where they believed Morsi was being held.

But in a sign of the country's deep divisions, many Cairo residents seemed to accept the official account and blamed the Brotherhood for its members' deaths. That has left the deposed president's followers isolated and angrier than ever.

Thousands of Morsi followers gathered at the site of a vigil near a mosque in northeast Cairo, where they have vowed to remain camping out in the fierce heat until he is restored to power - an aim that now seems vain.

"Revolutionaries! Free people! We will complete the journey!" chanted a speaker as the crowd held aloft a wooden coffin draped in an Egyptian flag.

Medical sources confirmed at least 55 people had been killed, raising the death toll in the incident, the deadliest in the two and a half years of Egypt's political turmoil apart from a riot at a soccer stadium in 2012.

A year after Morsi took power, millions of people took to the streets on June 30 to demand his resignation, fearing he was orchestrating a creeping Islamist takeover of the state and frustrated by his failure to turn around the crippled economy.

To the Brotherhood, his removal amounted to the reversal of democracy by entrenched interests who would never accept their election victories. The long-banned Brotherhood fears a return to the suppression endured for decades under autocratic rulers.

"The only road map is the restoration of the president elected by the people," said Hoda Ghaneya, 45, a Muslim Brotherhood women's activist. "We will not accept less than that, even if they kill us all."

The streets of Cairo were quieter on Tuesday but the Brotherhood called for more protests later in the day, raising the risk of further violence.

Away from the camp, its support is patchy in the capital. Some in Cairo are flying banners from balconies with portraits of General Abdel Fattah al-Sisi, the military commander who toppled Morsi.

In an address before Wednesday's start of the Muslim holy month of Ramadan, Sisi made clear who was in charge: "No party has the right to oppose the will of the nation," he said.

Egyptian media, mainly controlled by the state and Morsi's opponents, praised the army and denounced Monday's violence as the provocation of terrorists. Many Cairenes seemed to agree.

"Of course I condemn this: Egyptian versus Egyptian. But the people attacked the army, not the other way around," said Abdullah Abdel Rayal, 58, shopping in a street market in downtown Cairo on Tuesday morning.

Yet the Brotherhood still maintains support of many in rural provinces, after decades of dedicated underground organization.

ARAB CASH URGENTLY NEEDED

Saudi and UAE aid provides Egypt with urgently needed funds to maintain the subsidized fuel and food supplies it gives its 84 million people. Its coffers are running desperately short since the unrest of the Arab Spring drove away tourists and investors.

Both Gulf countries had promised aid after former autocrat Hosni Mubarak was toppled in 2011, but withheld it under Morsi.

Mansour, the judge named head of state by the army when it brought down Morsi last week, decreed overnight that a parliamentary vote would be held in about six months, faster than many expected. That would be followed by a presidential election. An amended constitution would be put to a referendum.

The Brotherhood rejected the plan. Senior Brotherhood figure Essam El-Erian condemned a "decree issued after midnight by a person appointed by the putchists, usurping the legislative power from a council elected by the people, and bringing the country back to stage zero".

The military-backed authorities seem to be resigned to restarting politics without the Brotherhood. Instead, they are courting the country's other main Islamist group, Nour, which had said on Monday it was pulling out of all political talks as a result of the attack on Morsi supporters.

Nour's signal that it would now support Beblawi as prime minister showed it had not fully abandoned politics.

"We do not object to Dr. Hazem. He is an important economic figure," Nour Party head Younes Makhyoun told Reuters by telephone. "He has no party affiliations that I am aware of."

In what appeared to be an olive branch to Islamists - and a move that also angered liberals - Mansour's decree included language put into the constitution last year that defined the principles of Islamic law, or sharia.

Nathan Brown, a leading expert on Egypt's constitution at George Washington University in Washington, said that while the overnight decree laid out a clear sequence for transition, it also repeated some mistakes made two years ago, after Mubarak.

"It was drawn up by an anonymous committee; it was issued by executive fiat; the timetable is rushed; the provisions for consultation are vague; and it promises inclusiveness but gives no clear procedural guidelines for it," he told Reuters.

The West has had a difficult time formulating a public response, after years of pushing Arab leaders towards democracy while at the same time nervous about the Brotherhood's rise. Demonstrators on both sides in Egypt have chanted anti-American slogans, accusing Washington of backing their enemies.

French Foreign Minister Laurent Fabius called Monday's violence "unacceptable" and said it should be investigated.

The military authorities did indeed announce an inquiry on Tuesday. They said they were pursuing 650 unidentified people for offences from "thuggery" to murder and terrorism.

Washington has refrained from calling the military intervention a "coup" - a label that under U.S. law would require it to halt aid. It called on Egypt's army to exercise "maximum restraint" but has said it is not about to halt funding for Egypt, including the $1.3 billion it gives the military.

A U.S. official said on Tuesday that Washington encouraged that the Egyptian authorities had laid out a plan.

The army has insisted that the overthrow was not a coup and that it was enforcing the "will of the people" after millions took to the streets on June 30 to call for Morsi's resignation.

Although Tuesday was comparatively quiet, there were minor violent incidents reported by late morning. Gunmen fired on a church in Port Said at the mouth of the Suez Canal overnight. Two people were wounded, medical sources said.

Reporting by Mike Collett-White, Maggie Fick, Alexander Dziadosz, Tom Perry, Yasmine Saleh, Peter Graff, Patrick Werr, Shadia Nasralla and Tom Finn in Cairo, Roberta Rampton, Lesley Wroughton and Arshad Mohammed in Washington and Michelle Nichols in New York; Writing by Peter Graff; Editing by Peter Millership and Alastair Macdonald

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