Egypt Should Approve new budget; IMF

The International Monetary Fund said Tuesday that Egypt’s divided politicians needed to agree on a new budget before it can offer financial support for the country.

In a statement following a staff mission to Cairo, the IMF said Egyptian authorities had made progress on their economic program, which it said “appropriately aims at maintaining macroeconomic stability during the ongoing transition, while promoting economic growth and protecting vulnerable households.”

But the Washington-based global crisis lender suggested that a loan program to help Cairo shore up its finances first required a solid political consensus on economic policy and a fiscal program.

“In the discussions with a wide spectrum of political parties in the People’s Assembly, there was a shared understanding on the need to address short-term challenges facing the economy and to promote reforms that can help achieve higher and more inclusive growth going forward,” the IMF said in a statement.

“The mission reaffirms that broad-based support for a national economic program is essential to bolster confidence and ensure its successful implementation in the period following the current political transition.”

That includes, it said, mobilizing political support for the country’s 2012-2013 budget.

“A financial arrangement to support Egypt’s economic program will be presented to the IMF Executive Board once this work is completed, and external financing from bilateral donors and other international institutions is confirmed.”

On Monday, the Muslim Brotherhood, Egypt’s top political force, said the IMF should not give a loan to the current government, likely to be turned out in next month’s presidential election.

A junta known as the Supreme Council of the Armed Forces has ruled Egypt since a popular uprising toppled long-time president Hosni Mubarak in February 2011.

“The problem… is that the current government’s performance is not good and it is a transitional government,” the Brotherhood’s presidential candidate, Khairat El-Shater, said.

“It would be unfair for the current government to use this loan… when the next one will have to pay for it.”

The Muslim Brotherhood, the country’s largest political force, won legislative elections in February and has been skeptical about signing up for an IMF loan.