Washington Nears Agreement with Cairo on $1 Billion Debt Relief

by San Antonio Attorney

The Obama administration and the new government of Egypt are nearing a $1 billion deal for debt relief, a senior US official said. Washington is seeking to assist Cairo with its troubled economy that resulted in the uprising of pro-democracy.

US diplomats and arbitrators for the new president of Egypt Mohamed Morsi were finalizing a deal, according to the official.

Development on the financial assistance, which had been disregarded in the course of Egypt’s political turmoil for 18 months, seems to indicate a wary alleviating of United States’ doubts about the new Egyptian president and an interest to display economic altruism to keep the long time partnership of the two nations from receding further.

The US had been a close ally of Egypt under the former president Hosni Mubarak and provides $1.3 billion annually in military assistance to Egypt aside from other aids.

Obama eventually called for the former president to resign due to mass demonstrations early last year, and Obama was bashed for taking too much time to act.

Washington, which has been cautious about Islamists for a long time, changed its policy a year ago to start formal communications with the Muslim Brotherhood. Morsi won because of the group but he got out from the group following his triumph.

Experts claim that the US can influence the course of Egypt’s policy is through economic assistance as Cairo endeavors to prevent a budget and balance of payments crisis.

Obama initially promised economic aid for Cairo a year ago. Obstructions continued to finalizing the debt help package, which is said to be a combination of debt payment waivers and complex debt trades.  It was not clear when a deal might be publicized.

But while the talks progressed in Cairo, Washington hinted its support for a $4.8 billion loan that Egypt is looking to get from the International Monetary Fund. Egypt would like to secure the loan before the year ends to beef up its troubled economy. Christine Lagarde, the IMF chief, went to Cairo a month ago to talk about the matter.

According to the IMF head, the agency promises that it would help in the economic reform of Egypt.


–  When creditors are hounding you for unpaid debt, you would think hard about how you can get back on track and out of debt. To obtain debt relief, ask a San Antonio Chapter 7 Attorney for advice.



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