Business, Economics and Jobs

US and Egypt near deal for $1 BN debt relief package


Egyptian supporters of Muslim Brotherhood presidential candidate Mohammed Morsi pray in Cairo's Tahrir Square on June 19, 2012.


Khaled Desouki

The United States is reportedly close to finalizing a deal with Egypt's new government that would give the country $1 billion in debt relief.

According to the Wall Street Journal, a team of senior State Department economic officials have been in Cairo for the past week, attempting to complete the terms of the aid package. President Barack Obama announced the package last year after the Arab spring uprising threatened Egypt's economic future.

The US already gives about $1.3 billion in military aid to Egypt, and was a close ally of former Egyptian President Hosni Mubarak, though Obama ultimately called on Mubarak to step down, Reuters reported.

Egypt's new president, Mohammad Morsi, was a member of the Muslim Brotherhood, an Islamist party. Because the US was wary of Egypt's new leadership, the money originally sat in "policy limbo," the Wall Street Journal reported.  

According to analysts cited by Reuters, the $1 billion aid package may be used to influence the direction Morsi decides to take Egypt, which has remained crucial to Washinton since 1979, when it signed a peace treaty with Israel.

Reuters also reported that Washington has given a thumbs-up to Egypt for a $4.8 billion loan from the International Monetary Fund.