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Show us Egypt’s fiscal reforms for IMF loan, Kerry tells Mursi

Published: Updated:

U.S. Secretary of State John Kerry urged Egypt to make concrete progress on economic reforms and rights to secure a $4.8 billion International Monetary Fund loan, saying the measures are needed to receive further aid from the U.S. Congress.

The Egyptians vowed that they had taken some steps, but Kerry “said we need to be able to show Congress that you've taken the necessary reforms,” a senior State Department official said on the sidelines of an African Union summit.

“I have been a strong advocate of support for Egypt. I continue to support aid for Egypt, but we need to see reforms in place that will encourage my former colleagues back at home to act,” he told the Egyptian leader, the official said as quoted by AFP.

Kerry met Egyptian President Mohamed Mursi for about an hour on the sidelines of an African Union summit on Saturday, discussing Syria's civil war, the Israeli-Palestinian conflict, human rights in Egypt and the country's faltering economy, the U.S official said according to Reuters.

Last year the IMF reached a deal in principle to provide a $4.8 billion loan to help finance the Egyptian government while it undertakes reforms.

But the Islamist-led government has been resistant to introducing the austerity measures needed to win the IMF funding, including raising taxes and cutting fuel subsidies, fearing such painful reforms could provoke social unrest.

However, an IMF deal could help shore up investor and donor concerns after two years of political instability since the overthrow of former president Hosni Mubarak in early 2011. The instability has depressed tourism, a crucial industry for Egypt.

The loan was close to completion in November when political changes in Cairo set it back. After talks earlier this month, the IMF said it was working with Egyptian authorities to devise a plan to address “growing fiscal imbalances.”

But no new talks have been scheduled.