Archive for the cabinet

Egypt not on verge of bankruptcy, says PM

by admin
December 30th, 2012

Prime Minister Hesham Qandil said Sunday that although the country's economic situation is "difficult and critical," the country is not going bankrupt.

“Countries don’t go bankrupt, but only companies do,” Qandil said at a press conference.

He said that the Cabinet would quickly take measures to address major economic challenges such as high unemployment and the gaping budget deficit, and promised to provide new job opportunities and improve the investment climate.

“The recent political crisis the country has been through [has] negatively affected the economy, tourism and foreign investments,” he added.

Qandil said that the budget deficit is one of the biggest challenges facing the government, adding that it will be resolved through increasing state profits, acquiring loans, reforming subsidies and fighting corruption.

The deficit is estimated at LE200 billion (US$27.5 billion).

Qandil said the Cabinet would hold talks with International Monetary Fund officials in January over the $4.8 billion loan that the government and the IMF reached an agreement on in November. The government requested a delay in final approval of the loan earlier this month during the unrest sparked by President Mohamed Morsy's controversial 22 November decree.

He said that the loan’s value is in the confidence boost it will give to the economy, not in the loan's amount, which will not cover the deficit.
 

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PM meets with Brotherhood, Salafi figures ahead of Cabinet reshuffle

by admin
December 28th, 2012

Prime Minister Hesham Qandil has begun consultations regarding the forthcoming Cabinet reshuffle. Eight new ministers are expected to be appointed following the successive resignation of several members of the Cabinet.

The reshuffle will most likely include the ministries of transport, local development, supply, electricity, petrol, communications, finance and legal affairs, a high-level Cabinet source told Al-Masry Al-Youm.

Qandil is to submit his nominations to President Mohamed Morsy for approval in the coming week. Nominations are expected to include members of the Freedom and Justice Party, and the Muslim Brotherhood’s guidance bureau is holding discussions on this matter.

A Brotherhood source said the group almost unanimously agreed to nominate Abdallah Shehata, the head of the FJP’s economic committee, as finance minister. Nour Party Secretary General Galal al-Morrah and Nour Party deputy head Sayed Mostafa are both also expected to receive nominations to the Cabinet. The three potential candidates all met with Qandil on Thursday.

Morrah told Al-Masry Al-Youm that he met with Qandil and Mostafa to discuss the current political and economic situation, as well as the nominations for the Cabinet. The Nour Party has nominated “a large number of its members to the new Cabinet, and it is in touch with the guidance bureau of the Brotherhood on this issue,” he added.

Several party leaders have objected to Qandil staying on as prime minister in the face of Egypt’s worsening economic crisis, and have called on Morsy to replace him with an expert in economics.

The Qandil Cabinet has not provided a clear plan to address the country’s economic decline and ongoing labor unrest, and has resorted to the former regime’s methods of borrowing domestically and internationally as a quick fix for cash flow problems, said Constitution Party deputy head Ahmed al-Bora’ei.

Hussein Zayed, the Shura Council MP for the Wasat Party, issued a press release on Thursday saying the party was shocked that Qandil had been entrusted with forming a new Cabinet.

The Wasat Party has objected to Qandil’s appointment as prime minister since the first day, the statement added, claiming that he was a non-politicized figure unfit for the position. Qandil’s Cabinet failed miserably in managing the country and was virtually absent during the violent political turmoil of the past two months, Zayed claimed.

Free Egyptians Party leader Mahmoud al-Alayly said the party had not received any communication on the nomination of members for the Cabinet reshuffle, but that the party would refuse any offers of positions in the Cabinet.

The president's insistence on asking Qandil to reshuffle the Cabinet is a sign of stubbornness against opposition forces, which demanded the dismissal of the Cabinet for its lack of political or economic vision, he added.

Edited translation from Al-Masry Al-Youm

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Cabinet spokesperson: PM to resign after parliamentary elections

by admin
December 27th, 2012

Prime Minister Hesham Qandil plans to resign immediately after the formation of the new Parliament, said cabinet spokesperson Alaa al-Hadidy.

 “But the president has the right to reject the resignation and keep him in office,” he said.

Hadidy also said the prime minister has not yet decided on whether or not to accept the resignation of Parliamentary Affairs Minister Mohamed Mahsoub, which he submitted on Thursday. Mahsoub said he resigned in protest against the Cabinet’s policies.

The next Cabinet reshuffle, recently promised by President Mohamed Morsy, would not take into account the media’s criticism of certain ministers or public figures, Hadidy added.

 “As the posts for transport minister and communications minister are vacant, President Morsy decided to make changes in other ministries as well,” he explained.

Morsy said in a speech on Wednesday commemorating the approval of the Constitution that Qandil would be the one to decide on what changes to make in the Cabinet, according to the needs of the current period.

The reshuffle would include the ministries of local development, supply and internal trade, electricity, petroleum, telecommunications, transportation, finance and parliamentary affairs.

Hadidy said Qandil would make his recommendations to the president sometime next week.

Edited translation from Al-Masry Al-Youm

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Central Bank governor resigns, Cabinet disputes announcement

by admin
December 22nd, 2012

Central Bank of Egypt Governor Farouk al-Oqda has resigned from his position, sources from the president's office reported Saturday.

The Cabinet, however, has denied any such reports.

The announcement comes on the heels of a report last week by Turkish news agency Anadolu, which reported that Oqda informed President Mohamed Morsy of his intention to leave his post by end of December, insisting that his original resignation, which he submitted in June, be accepted.

Speaking on condition of anonymity, sources told Anadolu that Oqda has nominated three potential successors for Morsy to choose from, including Federation of Egyptian Banks head and former CBE Deputy Governor Tareq Omar, Banque Misr head Mohamed Barakat and Commercial International Bank Managing Director Hesham Ramez.

The three successors nominated by Oqda include Federation of Egyptian Banks head and former CBE Deputy Governor Tareq Omar, Banque Misr head Mohamed Barakat and Commercial International Bank Managing Director Hesham Ramez.

President Mohamed Morsy had met with Ramez earlier on Saturday, raising the possibility of Ramez becoming the bank's next governor.

Oqda's reservation also comes after an announcement earlier this month that Morsy will issue a declaration to amend the 2003 presidential decree governing the Central Bank of Egypt. It has thus far not been issued.
 
The amendment reduces the number of board members and grants the president the right to nominate the next governor without the usual recommendations from the prime minister.

Cabinet interference in the bank's appointments was seen as detrimental for the bank's policies, since the Cabinet sets short-term financial policies while the Central Bank usually eyes more long term policies concerned with the exchange rate, determining the size and rate of growth of the money supply and banking sector laws, among other things.

The most recent decision by the Bank to allocate US$20 billion in cash reserves to prevent devaluation of the pound was received with mixed reactions. It was criticized by some experts for decreasing the already declining cash reserves. But others lauded the decision for preserving the pound long-term.
 
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Cabinet approves Islamic bonds law in principle

by admin
December 19th, 2012

The Cabinet during its meeting Wednesday approved in principle a draft law on sovereign Islamic bonds and decided it would be reviewed by the government’s legislative committee in preparation for submission to the legislative authority.

The proposed law regulates the provisions and procedures for issuing Islamic bonds, or sukuk, and determines financing, leasing and investment instruments.

The law also regulates the authority that would issue and manage these bonds, and states that a special fund shall be established and financed by the owners of these instruments.

The Egyptian Financial Supervisory Authority announced plans for drafting a similar law in early December to finance private sector Islamic bonds.

Since President Mohamed Morsy assumed office in June, there have been predictions that the government would introduce Islam-friendly financial instruments.

The capital market law, issued in 1992, allows the use of Islamic bonds, and the EFSA says the draft law would expand their use.

Edited translation from Al-Masry Al-Youm

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Cabinet ‘surprised’ over decision to postpone sales tax increases

by admin
December 10th, 2012

The Cabinet was not informed of President Mohamed Morsy’s decision to postpone a law on increasing commodity’ prices, and wasn’t consulted on the issue, an informed Cabinet source said.

The Cabinet had issued a press release Saturday defending the decision ahead of being informed about Ambassador Mohamed Refaa al-Tahtawi’s statements, in which he announced that the law would be canceled until a public discussion on it is held, the source said.

The source, who requested anonymity, told Al-Masry Al-Youm that there has been a lot of confusion in the Cabinet about canceling the decision, especially since the International Monetary Fund is set to vote on 19 December on Egypt’s request for a US$4.8 billion loan.

“The decision on increasing the prices might lead to reconsidering the approval of the Egyptian request,” the source said.

Cabinet spokesperson Alaa al-Hadeedy said in a statement Saturday “amendments on tax laws come within governmental, economic and financial reforms, and not as a response to anyone’s condition.”

“Decisions on taxes target achieving social justice. They do not affect those of low incomes. On the contrary, they provide social development resources and support the poor,” he added.

Morsy halted a presidential decision on amending provisions of the law on sales taxes, which would have increased taxes on about 50 kinds of goods, including steel, cement, fertilizers, cooking oil, cigarettes and electricity.

Edited translation from Al-Masry Al-Youm

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Egypt’s Cabinet: Implementation of property tax law to be postponed

by admin
December 7th, 2012

(MENA) – Egypt’s Cabinet took the decision to postpone once again the implementation of the property tax law issued in 2008 until July 2013 instead of January, the MENA news agency reported on Wednesday. The Cabinet also introduced amendments to the law exempting single house owners from the tax and raising exemption levels for properties to LE2 million up from LE500,000. Educational

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Tahrir Square calm on third day of anti-Morsy sit-in

by admin
November 26th, 2012

A sit-in by dozens of protesters in Tahrir Square entered its third day Monday. Demonstrators are protesting the new constitutional declaration issued by the president Thursday, which granted him sweeping legislative and executive powers.

The area has returned calm again after a day of clashes between police and protesters, which shifted from Qasr al-Aini Street, where the Cabinet and Parliament buildings are located, to Simon Bolivar Square.

The number of sit-in tents has increased inside the square’s central island. The square’s entrances remain closed by protesters for the fourth day in a row, with traffic movement redirected to alternative roads.

President Mohamed Morsy issued a constitutional declaration on Thursday, making his decrees immune to judicial challenges. He also removed controversial Prosecutor General Abdel Meguid Mahmoud, and made the country’s constitution-drafting assembly and the Shura Council immune to dissolution.

The measure sparked an uproar among judges and non-Islamist movements, which called for massive protests Tuesday in Tahrir. Meanwhile, the Muslim Brotherhood, of which Morsy was a former leader, called for parallel demonstrations to support his decisions.

Edited translation from Al-Masry Al-Youm

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Subsidy on 95-octane gasoline to be lifted in 3 days, says Finance Ministry source

by admin
November 22nd, 2012

The Finance Ministry will lift the subsidy on 95-octane gasoline in three days in a move that will bring savings to the public treasury of between LE120-130 million, a ministry source said Thursday.

The fuel will now be sold at 585 piasters per liter, up from 275 piasters.

The source described the savings as “nominal” in relation to the budget deficit, but it will mean that small social programs such as feeding schoolchildren initiatives can be funded.

It is necessary to cancel subsidies for 95-octane gasoline, the source explained to Al-Masry Al-Youm, as beneficiaries are not those in need of financial support.

Savings to the budget as a result of all the proposed cuts to subsidies are expected to be up to LE26 billion, with cuts being applied gradually until these savings are made in the budget of fiscal year 2013/2014.

The financial savings expected from cutting subsidies for petroleum products as well as energy intensive-consumption factories during the current fiscal year are around LE3-4 billion.

The sources added that the coupons system for gasoline, diesel fuel, and butane cylinders would start to come into effect in April.

A source at the Ministry of Supply and Internal Trade on Thursday described the Cabinet's decision to cut subsidies on 95-octane gasoline as “defective,” asserting that it would lead to a new crisis in the coming few days.

The ministry officially alerted the Cabinet to its concerns about the effects of cancelling the 95-octane gasoline subsidy without a developing a clear mechanism, the source told Al-Masry Al-Youm on condition of anonymity.

There are concerns that the move would lead to increased demand for 90-octane and 92-octane gasoline that supply might not be able to meet.

The Petroleum Ministry would have preferred to lift the subsidy on 95-octane gasoline as a first step before the subsidies on 92, 90 and 80 octane gasoline would also be lifted, the source said.

Edited translation from Al-Masry Al-Youm

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Cabinet to remove subsidies for octane 95 gas

by admin
November 21st, 2012

 

The Cabinet will remove subsidies on octane 95 gasoline, International Cooperation and Planning Minister Ashraf al-Araby said Wednesday.

Octane 95 gasoline will be distributed using coupons starting in April, Araby told reporters at the cabinet headquarters. He also said 1600cc vehicles would have special shares.

Reducing the subsidies that represent a quarter of government spending is an essential prerequisite for the International Monetary Fund’s US$4.8 billion dollar loan, which the government hopes can bridge the state budget deficit.

The government spent LE115 billion on subsidies for petroleum products last year.

Prime Minister Hesham Qandil had told Reuters on Sunday that the government would remove subsidies for the high-grade fuel within a week.

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