* Talks on IMF loan suspended in December
* IMF delegation invite expected within two weeks
* Cutting subsidies sensitive ahead of elections
By Asma Alsharif
CAIRO, Feb 26 Egypt will send a new economic
plan needed to secure a lifeline from the International Monetary
Fund to parliament within two days after releasing a summary
that makes no mention of cutting subsidies and other
Cairo is trying to secure a $4.8 billion IMF loan to shore
up its finances as the economy faces a deep crisis rooted in two
years of political turmoil that have drained foreign currency
reserves to a critical level.
The turmoil has driven away foreign investors and tourists
who are a major source of the foreign currency Egypt needs to
import fuel and wheat.
Finance Minister Al-Mursi Hegazy told reporters a revised
economic reform plan would be sent to the parliament within two
days, and then to the IMF immediately afterwards.
"As soon as the laws are sent to parliament, they will be
sent (to the IMF)," he told reporters, adding he expected a
response from the IMF within about 10 days to two weeks after
the plan was sent to them.
Asked when Egypt planned to invite an IMF delegation to
resume talks on the loan, Hegazy said: "I think within 10 days
to two weeks."
The Fund and Egypt agreed on the loan in principle in
November, but ratification was suspended at Cairo's behest in
December after Mursi announced and then suspended tax increases
that drew heavy criticism from the opposition.
A summary of the revised plan released by the government on
Monday called for a levy on stock market transactions and a flat
25 percent tax on Egyptian companies, but did not spell out
plans for cutting subsidy spending or detail other tax
The government aims to raise 450 million Egyptian pounds
($66.8 million) a year from the stock exchange tax, Hani Qadri,
Egypt's deputy minister of finance said at a press conference.
A fifth of the state budget goes on energy subsidies alone,
but cutting them is widely unpopular, making it a sensitive
issue ahead of parliamentary elections scheduled to start in
As part of its plan to cut fuel subsidies, the government
raised prices for fuel oil by 50 percent last week for some
industries. It also plans to implement a quota system for
subsidised fuel in July and hopes energy use in the country to
be at cost price within three years.
On Monday, Investment Minister Osama Saleh said Egypt would
reopen talks with the IMF next month.
Egypt's foreign currency reserves tumbled to $13.6 billion
in January from $36 billion before Mubarak was overthrown in
February 2011. The Egyptian pound has fallen over 8 percent
since the central bank started auctioning dollars at the end of
The government is targeting a deficit for this financial
year of 189.7 billion Egyptian pounds ($28 billion), or 10.9
percent of total economic output.