Egypt showered with Gulf billions in show of support for army

CAIRO Wed Jul 10, 2013 12:45am BST

1 of 6. Egypt's interim President Adli Mansour (R) meets with UAE's National Security Adviser Sheikh Hazza bin Zayed Al Nahyan at El-Thadiya presidential palace in Cairo July 9, 2013 in this picture provided by the Egyptian Presidency.

Credit: Reuters/Egyptian Presidency/Handout via Reuters

CAIRO (Reuters) - Gulf states showered Cairo with $8 billion in aid on Tuesday, showing their support for the Egyptian army's move to push the Muslim Brotherhood from power, a day after troops killed dozens of the movement's supporters.

Military-backed interim head of state Adli Mansour named a liberal economist as acting prime minister and announced a faster-than-expected timetable for elections in six months.

Mansour's army backers are under pressure to plot a path back to democracy less than a week after they overthrew Egypt's first freely elected president, the Brotherhood's Mohamed Mursi.

The country is now more divided than ever in its modern history after 55 people were killed when troops opened fire on Brotherhood supporters in the capital. The movement says the victims were praying in peace; the government blames the Islamists for provoking the violence by attacking the soldiers.

Mansour, a judge installed as acting president when the military removed Mursi, named Hazem el-Beblawi as interim prime minister. He served briefly as finance minister in 2011. Former U.N. diplomat Mohamed ElBaradei, now a liberal party leader, is to be deputy president responsible for foreign affairs.

Importantly, the choice of Beblawi won the acceptance of the ultra-orthodox Islamist Nour Party - sometime ally of Mursi and the Brotherhood. Nour leaders have been courted by the interim authorities to show that Islamists need not be marginalised.

Monday's bloodshed has raised alarm among key donors such as the United States and the European Union, as well as in Israel, with which Egypt has had a U.S.-backed peace treaty since 1979.

Wealthy Gulf Arab states, long suspicious of the Muslim Brotherhood, have shown fewer reservations. The United Arab Emirates offered a grant of $1 billion and a loan of $2 billion. Saudi Arabia offered $3 billion in cash and loans, and an additional $2 billion worth of much-needed fuel.

In a further demonstration of its support, UAE Foreign Minister Abdullah bin Zayed visited Egypt on Tuesday, the most senior foreign official to arrive since Mursi's removal.

"EVEN IF THEY KILL US ALL"

The army brought down Mursi a year after he took power, saying it was acting on popular will because millions of people had taken to the streets to demand his resignation.

To the Brotherhood, his removal amounted to the reversal of democracy by entrenched interests who would never accept their election victories. The long-banned Brotherhood fears a return to the suppression endured for decades under autocratic rulers.

"The only road map is the restoration of the president elected by the people," said Hoda Ghaneya, 45, a Muslim Brotherhood activist. "We will not accept less than that," she added. "Even if they kill us all."

Thousands of Mursi followers gathered on Tuesday at the site of a vigil near a mosque in northeast Cairo, where they have vowed to remain camping out in the fierce heat until he is restored to power - an aim that now seems vain.

"Revolutionaries! Free people! We will complete the journey!" chanted a speaker as the crowd held aloft a wooden coffin draped in an Egyptian flag. The vigil and rally lasted through the day and well into the evening, with speaker after speaker calling for the restoration of Mursi, who is in custody.

Brotherhood supporters also marched in their thousands in the Mediterranean port of Alexandria, Egypt's second city, which has been the scene of violence in recent days.

Medical sources confirmed at least 55 people had been killed in Monday's dawn shootings, raising the death toll in the incident, the deadliest in the two and a half years of Egypt's political turmoil apart from a riot at a soccer stadium in 2012.

The Brotherhood says Monday's violence was an unprovoked attack on worshippers holding peaceful dawn prayers outside a barracks where they believed Mursi was being held.

The authorities say the shooting was in response to an attack on army troops and announced an investigation into 650 suspects for offences from "thuggery" to murder and terrorism. Egyptian media, mainly controlled by the state, praised the army and denounced Monday's violence as the work of terrorists.

Amnesty International said that whether or not the security forces acted in response to provocations, they were guilty of using "grossly disproportionate force".

But in a sign of the country's deep divisions, most Cairo residents seemed to accept the official account and blame the Brotherhood for its own members' deaths.

"Of course I condemn this: Egyptian versus Egyptian. But the people attacked the army, not the other way around," said Abdullah Abdel Rayal, 58, shopping in a street market in downtown Cairo on Tuesday morning.

Some in Cairo are flying banners from balconies with portraits of General Abdel Fattah al-Sisi, the military commander who toppled Mursi.

In an address before Wednesday's start of the Muslim holy month of Ramadan, Sisi made clear who was in charge: "No party has the right to oppose the will of the nation," he said.

ARAB CASH URGENTLY NEEDED

Tuesday's Saudi and UAE aid provides Egypt with urgently needed funds to distribute the subsidised fuel and food that sustains its 84 million people. Coffers are desperately short since Arab Spring unrest drove away tourists and investors.

The money also buys time for Cairo to negotiate with the International Monetary Fund for a $4.8 billion rescue loan, long stalled. The United States gives Cairo $1.5 billion a year, most of it in the form of direct aid to the Egyptian military.

Both Saudi Arabia and the UAE had promised aid after former autocrat Hosni Mubarak was toppled in 2011, but withheld it under Mursi. Mursi's administration had help, notably, from Qatar, which has warmer ties with the Muslim Brotherhood.

Another country which developed good relations with Mursi, Turkey, has been criticised by Cairo's new leaders. Its ambassador was summoned to explain why Ankara's Islamist-rooted government denounced the army move as an "unacceptable coup".

Acting Egyptian leader Mansour decreed overnight that a parliamentary vote would be held in about six months, faster than many expected. That would be followed by a presidential election. An amended constitution would be put to a referendum.

The Brotherhood rejected the plan. Senior Brotherhood figure Essam El-Erian condemned a "decree issued after midnight by a person appointed by the putchists, usurping the legislative power from a council elected by the people, and bringing the country back to stage zero".

The military-backed authorities seem to be resigned to restarting politics without the Brotherhood. Instead, they are courting the country's other main Islamist group, Nour, which had said on Monday it was pulling out of all political talks as a result of the attack on Mursi supporters.

Nour's signal that it would now support Beblawi as prime minister showed it had not fully abandoned politics: "We do not object to Dr Hazem. He is an important economic figure," Nour Party head Younes Makhyoun told Reuters.

In what appeared to be an olive branch to Islamists - and a move that also angered liberals - Mansour's decree included language put into the constitution last year that defined the principles of Islamic law, or sharia.

Nathan Brown, a leading expert on Egypt's constitution at George Washington University in Washington, said that while the overnight decree laid out a clear sequence for transition, it also repeated some mistakes made two years ago, after Mubarak.

"It was drawn up by an anonymous committee; it was issued by executive fiat; the timetable is rushed; the provisions for consultation are vague; and it promises inclusiveness but gives no clear procedural guidelines for it," he told Reuters.

The West, and Washington in particular, has had a difficult time formulating a public response after years of pushing Arab leaders towards democracy while nervous about the Brotherhood's rise. Demonstrators on both sides in Egypt chant anti-American slogans, accusing Washington of backing their enemies.

Washington has refrained from calling the military intervention a "coup" - a label that under U.S. law would require it to halt aid.

The State Department said on Tuesday that Washington was encouraged that the Egyptian authorities had "laid out a plan for the path forward" with the election timetable.

Although Tuesday was comparatively quiet, there were minor violent incidents. Gunmen fired on a church in Port Said at the mouth of the Suez Canal overnight. Two people were wounded.

(Reporting by Mike Collett-White, Maggie Fick, Alexander Dziadosz, Tom Perry, Yasmine Saleh, Peter Graff, Patrick Werr, Shadia Nasralla and Tom Finn in Cairo and Arshad Mohammed in Washington; Writing by Peter Graff; Editing by Alastair Macdonald)

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