(Corrects minister's name in sixth paragraph)
By Arshad Mohammed
CAIRO, March 2 U.S. Secretary of State John
Kerry plans to stress the importance of Egypt reaching an IMF
agreement and achieving political consensus for painful economic
reforms, a U.S. official said on Saturday.
Speaking shortly before Kerry arrived in Cairo for a two-day
visit, the official said if Egypt could agree on a $4.8 billion
loan from the IMF, this would bring in other funds from the
United States, European Union and Arab countries.
However, the official said Kerry believed Egypt needed to
increase tax revenues and reduce energy subsidies, measures that
are likely to prove highly unpopular with Egyptians who are
struggling during the country's economic crisis.
"His basic message is it's very important to the new Egypt
for there to be a firm economic foundation," the official told
reporters as Kerry flew to Cairo.
"In order for there to be agreement on doing the kinds of
economic reforms that would be required under an IMF deal there
has to be a basic political ... agreement among all of the
various players in Egypt," the official said on condition of
Egypt said on Thursday it would invite a team from the
International Monetary Fund to reopen talks the loan - which was
agreed in principle last November but put on hold at Cairo's
request during street violence the following month - and the
Investment Minister Osama Saleh expressed hope that a deal could
be done by the end of April.
Egypt's foreign currency reserves have fallen to not much
more than a third of their level before the 2011 overthrow of
Hosni Mubarak as the nation's crisis deepens.
However, the hopes for political consensus between the
ruling Islamaists and opposition parties seem slim. Liberal and
leftist opposition parties have announced a boycott of
parliamentary elections, scheduled for April to June, over a new
constitution produced by an Islamist-dominated assembly and over
Nevertheless, Kerry will stress the need for agreement on
reform across the political spectrum on reforms that are likely
to be unpopular and winning approval in the Shura Council,
Egypt's upper house of parliament.
"What they need to do is ... things like increasing tax
revenues, reducing energy subsidies, making clear what the
approval process will be to the Shura council for an IMF
agreement, that kind of thing," said the official.
(Reporting by Arshad Mohammed, editing by Marwa Awad and David