US Planning $1B Egypt Bailout

Diplomats aim to keep Egypt stable, friendly by shoring up economy

By Rob Quinn,  Newser Staff

Posted Sep 4, 2012 5:50 AM CDT | Updated Sep 4, 2012 7:50 AM CDT

(Newser) – American diplomats are close to finalizing a $1 billion bailout package to help save an Egyptian economy battered by political upheaval, reports the Wall Street Journal. The aid package, which includes debt relief and assistance for small- to medium-sized Egyptian businesses, was first announced last year but has been on hold amid diplomatic disagreements on where to allocate the funds and concerns about the Islamist government elected in June. Egypt, facing a $25 billion budget shortfall, has already asked the IMF for $4.8 billion in low-interest loans and secured a $2 billion loan from Qatar.

US officials hope the bailout will help stabilize Egypt's economy—and keep the longstanding ally from cozying up to countries like Iran. US officials have made it clear that they expect the Egyptian government to treat all segments of society fairly. "Progress will only be possible if the talents of all citizens are drawn upon and all have a voice—men and women, all religious groups, and all parts of the country," a State Department official says.

An Egyptian street vendor sleeps as another sells bread on the side of a street in Cairo.
An Egyptian street vendor sleeps as another sells bread on the side of a street in Cairo.   (AP Photo/Khalil Hamra)
Times must be tough if this Cairo bank can't afford a new letter G.
Times must be tough if this Cairo bank can't afford a new letter G.   (AP Photo/Victoria Hazou,File)
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