Saudi Arabia's Abdullah welcomes Egypt's Morsi.
(photo credit: reuters)
The United Arab Emirates has agreed to grant Egypt $1 billion and lend
it another $2 billion, an Egyptian source said on Tuesday, throwing it a
financial lifeline after the army ousted the country's Islamist president last
The source also said Saudi Arabia may lend Egypt another $2 billion, which he
expected to be confirmed within two days.
Egypt's finances have been devastated by political and economic instability
since the popular uprising that pushed Hosni Mubarak out of the presidency two
and a half years ago.
The UAE's $3 billion was expected to be part of a larger financial package from
the Gulf emirate, said the source close to the talks. The loan would be in the
form of a deposit at Egypt's central bank, although the interest rate and
maturity had yet to be finalized.
UAE Foreign Minister Sheikh Abdullah bin Zayed and National Security Adviser
Sheikh Hazza bin Zayed flew to Cairo on Tuesday morning at the head of the most
senior foreign delegation to visit Egypt since the overthrow on Wednesday of
He became president a year ago in Egypt's first freely contested election.
The delegation was coming to "show full support to the people of Egypt -
political support, economic support," Egypt's foreign ministry spokesman
Badr Abdelatty said earlier.
With turmoil driving away foreign investors and tourists, Egypt is running
dangerously short of cash to provide the subsidized bread and fuel that its 84
million people rely on. Egyptian newspapers, mainly controlled by the state or
by Morsi's opponents, described Monday's violence as the result of terrorism by
Meanwhile, Egypt's interim rulers issued a faster than expected timetable for
elections to try to drag the country out of crisis, a day after 51 people were
killed when troops fired on a crowd supporting Morsi.
The streets of Cairo were quiet
on Tuesday but Morsi's Muslim Brotherhood movement called for more protests
later in the day, raising the risk of further violence.
Under pressure to restore democracy quickly, Adli Mansour, the judge
named head of state by the army when it brought down Mursi last week, decreed
overnight that a parliamentary vote would be held in about six months. That would be followed by a presidential election.
In an important positive
signal for the transitional authorities, the ultra-orthodox Islamist Nour Party
said it would accept ex-finance minister Samir Radwan as prime minister,
potentially paving the way for an interim cabinet. The stakes were raised
dramatically by the bloodshed on Monday, the worst since Morsi was toppled by
the military. The army opened fire outside Cairo's Republican Guard barracks
where the deposed leader is believed to be held.
The bloodshed has also raised
alarm among key donors such as the United States and the European Union, as
well as in Israel, with which Egypt has had a US-backed peace treaty since
1979. Officials said troops fired in response to an attack by armed assailants.
The protesters disputed that account, insisting they were conducting peaceful
Mansour decreed that Egypt will hold new parliamentary elections once
amendments to its suspended constitution are approved in a referendum. In what
appeared to be an olive branch to Islamists, the decree included controversial
language put into the constitution last year that defined the principles of
Islamic sharia law.
The UAE - long skeptical of the Brotherhood - had pledged billions in aid to
Egypt after the fall of Mubarak but held the money back during Morsi's year in
The West has had a harder time formulating a public response, after years of
pushing Arab leaders towards democracy while at the same time nervous about the
Brotherhood's rise. Demonstrators on both sides in Egypt have chanted anti-American
slogans, accusing Washington of backing their enemies.
Washington has refrained from calling the military intervention a
"coup" - a label that under US law would require it to halt aid. It
called on Egypt's army to exercise "maximum restraint" but has said
it is not about to halt funding for Egypt, including the $1.3 billion it gives