By Ola Galal, Ahmed A Namatalla and Mahmoud Kassem - Nov 26, 2011 7:47 PM GMT+0700
One person died in clashes with police in Cairo as protesters rejected the military’s appointment of new Prime Minister Kamal el-Ganzouri and demanding the generals cede power.
Field Marshal Mohamed Hussein Tantawi, head of the ruling army council, said he gave el-Ganzouri “full prerogatives,” state-run television reported yesterday. Hundreds spilled over from Tahrir Square and started a sit-in in front of the nearby Cabinet building to protest el-Ganzouri’s appointment. One person died in clashes with police today at the site, state-run Nile News reported.
The council said elections scheduled to start Nov. 28 won’t be postponed and that it will stay in power until a presidential poll in June. Voting will take place over two days instead of one during each round, the Cabinet said on its Facebook page. In Cairo’s Abassiya Square, a one-day counter-protest backing the military grew into thousands after prayers on Friday.
“It’s a controversial appointment because it didn’t unite people, it divided them,” said Wael Ziada, Cairo-based head of research at EFG-Hermes Holding SAE. “Some protesters don’t believe he is the right figure to take independent decisions in the coming period. The best way forward is to carry on with peaceful elections and for the military council to hand over power to a national rescue government immediately afterward.”
Military Council
The army council, which took over after Hosni Mubarak’s ouster in February, is seeking to form an interim government in an attempt to defuse unrest that erupted on Nov. 19 and has left at least 38 people dead, according to the Health Ministry. The violence, which began in Cairo and cities including Alexandria, threatens to derail the elections and undermine attempts to secure financing for an economy still struggling to recover from this year’s revolt.
“Kamal el-Ganzouri is not good because he is a remnant of the old regime,” said Saeed Abu el Ela, 48, a lawyer who joined the Tahrir Square protest. “They should have picked someone new so the people would accept him. My problem is that he’s from the old regime and he’s old.”
El-Ganzouri, 78, told journalists he hopes a new government will be formed within a few days, though he said it’s unlikely that will happen before parliamentary elections. El-Ganzouri said he wouldn’t have accepted the role of prime minister had he believed the military council wanted to stay in power. He said that he has been given more powers than any previous government.
Muslim Brotherhood
“I asked the field marshal to take some time to be able to form a government that will satisfy the whole country,” he said in a televised speech yesterday.
Central Cairo was peaceful after Muslim worshippers completed their prayers, as the crowd in Tahrir Square grew. Protest leaders have called for a million-person rally against military rule. The Muslim Brotherhood, Egypt’s largest Islamic group, won’t take part, Mahmoud Ghozlan, a spokesman for the organization, said by telephone. The group is expected to form one of the largest blocs in parliament after the election.
Mohamed ElBaradei, the former head of the United Nations nuclear agency who said he will run for president, visited Tahrir Square yesterday.
Some protesters marched to the Cabinet office where they are holding a sit-in against the appointment of el-Ganzouri, the state-run Middle East News Agency reported. The protesters said they were nominating presidential hopefuls ElBaradei, Abdel Momeim Abu el-Fotouh, and Hamdine Sabahi to form a national salvation government, the Cairo-based agency said.
El-Ganzouri held several high-profile positions in 17 years of service under Mubarak, starting with his appointment as the minister of planning in 1982. His service ended after a three- year term as prime minister from 1996 to 1999. He is an economist with a PhD from the University of Michigan.
“He was the one who oversaw the privatization of companies and fired workers,” said Fatma Ramadan, 45, an activist at the Tahrir protest. “He has many problems.”
Lack of Trust
The April 6 Youth Movement, one of the groups that organized the anti-Mubarak uprising, said “the military council must know that we don’t trust it or its choices.”
Standard & Poor’s cut Egypt’s credit rating on Nov. 24, while the government raised less than half of its target sum at an auction of six-month and one-year Treasury bills, and was forced to pay record yields above 14 percent on both securities. The central bank unexpectedly raised interest rates for the first time since 2008 to stem flight from the pound.
Egypt’s five-year credit default risk rose to the highest since March 2009 yesterday, gaining eight basis points, or 0.08 percentage point, to 563, according to data provider CMA. That compares with 292 for Tunisia, the Arab country whose uprising also ousted its president in January.
The military council dissolved parliament and suspended the constitution after taking over from Mubarak, saying it aimed to hand power to a democratically elected government after elections.
Credit Rating
In cutting Egypt’s credit rating to B+, four steps below investment grade, S&P cited renewed violence amid a “highly polarized political landscape” that has weakened public finances and will lead to further declines in international reserves.
Egypt’s economy grew 1.8 percent in the fiscal year that ended on June 30, its weakest performance in at least a decade. Foreign-currency reserves have declined $14 billion this year to $22.1 billion last month.
To contact the reporters on this story: Ola Galal in Cairo at ogalal@bloomberg.net; Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net; Mahmoud Kassem in Cairo at mkassem1@bloomberg.net
To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net
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