CAIRO (Reuters) - Egypt's parliament overwhelmingly rejected the army-appointed cabinet's plan to cut state spending on Tuesday, complicating the government's efforts to secure IMF help to fight a balance of payments crisis.
The International Monetary Fund (IMF) wants the backing of Egyptian political forces for the government's economic reform plan before it signs off on an emergency loan. Egypt has been hamstrung with economic troubles since a popular uprising in January last year.
Prime Minister Kamal al-Ganzouri's government presented the Islamist-dominated parliament with the plan on February 26 and it has been discussed over ten sessions.
Only six out of 365 lawmakers who cast their votes approved of the plan, which was criticized as vague and incoherent. Some said the program failed to improve public security, reduce poverty or provide the revenue to raise wages.
Assembly speaker Saad al-Katatni said the "government must submit its resignation to the head of state".
The rejection is a fresh setback in the government's efforts to unlock the $3.2 billion IMF loan, which it requested earlier this year, and shore up an economy laid low by 18 months of political turmoil.
The government is expected to step aside by the end of June after a presidential election. The Muslim Brotherhood is demanding an important role in the next government and has fielded a candidate for head of state.
Finance Minister Mumtaz al-Seaad said this week he expected the first loan installments to arrive in May and the government had told the IMF it had political backing for the loan.
But an IMF statement on Tuesday provided little evidence of significant progress.
"The IMF remains ready to support a home-grown program that maintains macroeconomic stability and promotes inclusive growth, enjoys the necessary broad political support and includes adequate external financing from Egypt's international partners," the statement said.
"We look forward to advancing these discussions and to bringing a program for consideration by the IMF Executive Board as soon as the above conditions are in place," it added.
Reporting by Ahmed Tolba; Writing by Marwa Awad; Editing by Tom Pfeiffer, Ron Askew