"Serious about reforms"

Egypt's opposition agree with Suleiman on first steps

Talks between Egypt's government and opposition parties eased pressure for the immediate departure of President Hosni Mubarak, helping the country's financial system to return toward normality.

Vice President Omar Suleiman, who met with some opposition leaders yesterday, promised a draft list within a month of constitutional changes needed for free elections. Protesters remained on the streets of central Cairo demanding that Mubarak step down before his term ends in September, though there was none of the violence that erupted last week. Banks are reopening and the government plans to resume selling Treasury bills today, Deputy Central Bank Governor Hisham Ramez told Bloomberg TV.

"The events in Egypt seem to be subsiding a bit," said Theodore Karasik, director of research at the Dubai-based Institute for Near East and Gulf Military Analysis. At the same time, "protests could come back to the same height if the demands aren't met in a timely manner."

Almost two weeks of protests against Mubarak, leaving as many as 300 dead according to the United Nations, have shaken the 30-year rule of a key U.S. ally and pushed oil prices higher as the unrest spread to other Middle East nations. The government promised yesterday to ease emergency laws in place since Mubarak came to power, release political prisoners and allow media freedom.

Brotherhood, Elbaradei

The Muslim Brotherhood, the largest opposition faction which joined in the talks with Suleiman, and former United Nations atomic agency chief Mohamed ElBaradei said they still back the protesters' demand for Mubarak to quit immediately.

Oil fell for a third day as the tension eased, dropping 0.5 percent to $88.59 at 8 a.m. in London, the lowest for more than a week. It had risen as high as $92.84 on Jan. 31, on concern the unrest in Egypt may disrupt flows through the Suez Canal.

The cost of insuring Egyptian sovereign debt fell 9 basis points to 357, according to CMA prices for credit-default swaps. The Egyptian pound, shielded for a week by the closure of the country's financial system, fell 1.3 percent to 5.933 per dollar, the lowest since January 2005, when it resumed trading yesterday.

Ramez said he doesn't expect a surge in yields at today's auction which aims to raise 15 billion Egyptian pounds ($2.6 billion). He said the country's lenders are "very liquid" and there are no immediate signs of a bank run as the financial system reopens after staying closed last week.

Egypt's stock market remains closed, Hisham Turk, communications manager at the exchange, said by telephone in Cairo. It may open during the week, he said. The benchmark index slid 16 percent in the week through Jan. 27.

'Serious about reforms'

The opposition meeting with Suleiman achieved "big progress," and the government is "serious about reforms," according to billionaire Naguib Sawiris, the chairman of Orascom Telecom Holding SAE, who attended. Sawiris told Bloomberg TV that ElBaradei, who wasn't at the meeting, should be brought into the negotiations because he has been one of the leaders "behind the push for reform."

The U.S., which has relied on Mubarak's regime to encourage Arab acceptance of Israel and maintain a blockade on the Gaza Strip, ruled by the Islamist Hamas group, has promoted talks between Egyptian protesters and the government without publicly repudiating its ally.

President Barack Obama declined to discuss Mubarak's intentions. "Only he knows what he's going to do," Obama said, speaking on Fox News before the Super Bowl football broadcast late yesterday.

'Minimum Human Right'

The U.S. should work with Gulf Arab countries to "ensure the young people of Egypt will find jobs and will not have to go back to the streets to request the minimum human right of a decent job and democratic rights," Sawiris said. "Investors should understand that a really democratic regime is the best insurance for their investment."

Other Arab countries have been gripped by spreading instability. In Yemen, police used tear gas against anti- government protests Feb. 3, and Jordan's King Abdullah dismissed his government last week. Algeria's President Abdelaziz Bouteflika said Feb. 3 that a 19-year-old state of emergency will be lifted "in the very near future." The protests began in Tunisia, where President Zine El Abidine Ben Ali was forced from office last month after two decades in power.

(Published by Bloomberg - February 7, 2011)

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