IMF's Lagarde says keen to engage with Egypt on economy

Reuters

WASHINGTON, Oct 10 (Reuters) - The International MonetaryFund is ready to work with Egyptian authorities to helpstabilize the country's economy, IMF chief Christine Lagardesaid on Thursday, citing discussions that have been ongoing forthe past year and a half.

"We are keen and ready to engage with the Egyptianauthorities in order to help the country and the people of Egyptstabilize the situation, address the economic difficulties thatit's facing," Lagarde said in a news conference.

"We believe that it has to be a cooperation between theEgyptian authorities on the one hand, us, the donors, whoever isparticipating and is keen to stabilize the financial andeconomic situation of the country," she said.

At a separate briefing on Thursday, Nemat Shafik, deputymanaging director at the IMF, suggested the IMF would be open toa joint Egypt program with Gulf countries, which have alreadystepped in with billions of dollars in aid.

"We would be happy to have a partnership with the Gulf onthe transition," she said.

The IMF had been negotiating a critically needed $4.8billion loan with Egypt before the military removal of electedPresident Mohamed Mursi in early July.

The current Egyptian cabinet as a whole seems to be inlittle rush to resume talks with the IMF about the loan, whichwould come attached to economic reform commitments that thegovernment might find politically risky.

For the moment, Egypt has received pledges of aid fromseveral Gulf countries, including Kuwait and Saudi Arabia, thatis expected to help Egypt avoid a balance of payments crisis andovercome fuel shortages that partly caused a wave of publicanger against Mursi.

But IMF loan, with its attendant conditions, is widelyviewed as necessary to convince foreign donors and investorsthat Egypt's economy is on the right track.

The IMF is currently in the midst of several joint programswith the European Commission and European Central Bank tosupport indebted countries in the euro zone.

The IMF's involvement was seen as critical to lendcredibility to the programs, but the so-called "troika" oflenders has also clashed at times over what measures would benecessary and politically feasible to help countries such asGreece.

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