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Egypt Slams Door on Suez Canal Debt-Swap Plan
(MENAFN) Egypt's government moved swiftly on Sunday to shut down speculation that the Suez Canal or other national assets could be used to pay down state debt, insisting the strategic waterway has no place in any such arrangement.
The declaration from the Cabinet came in direct response to a circulating proposal that floated transferring certain state assets to the Central Bank of Egypt in exchange for trimming a portion of the government's domestic debt load.
Officials dismissed the plan as a "purely personal view" that carries no weight as government policy, adding flatly that the concept is "unacceptable and will not happen."
The Cabinet reserved its firmest language for the Suez Canal specifically, stating there is no scenario under which the waterway would be swapped, mortgaged, or handed over in any form to offset debt. Authorities framed the canal as inseparable from Egypt's national security and sovereignty, underscoring its outsized role in both the domestic economy and international shipping trade.
Beyond the canal, the government pushed back on the entire logic behind shuffling state assets over to the Central Bank, arguing that shifting assets and liabilities between public institutions does nothing to shrink the nation's total debt burden. Officials said genuine progress on public debt requires tackling its structure, servicing costs, and liquidity conditions head-on — not asset transfers that leave overall obligations unchanged.
The controversy traces back to Saturday, when Hassan Heikal, an adviser to the prime minister, floated the idea publicly — proposing that stakes in state-owned firms, or even the Suez Canal itself, could be used to offset domestic debt by shifting the associated liabilities onto the Central Bank. He pointed to a recent debt resolution involving Egypt's National Media Authority — previously known as Maspero — as a template for how such a deal might work.
That precedent is fresh: just Thursday, the government confirmed a settlement clearing 88.3 billion Egyptian pounds ($1.77 billion) that the National Media Authority owed to the National Investment Bank — though officials have not disclosed the settlement's terms or which assets, if any, were involved.
The declaration from the Cabinet came in direct response to a circulating proposal that floated transferring certain state assets to the Central Bank of Egypt in exchange for trimming a portion of the government's domestic debt load.
Officials dismissed the plan as a "purely personal view" that carries no weight as government policy, adding flatly that the concept is "unacceptable and will not happen."
The Cabinet reserved its firmest language for the Suez Canal specifically, stating there is no scenario under which the waterway would be swapped, mortgaged, or handed over in any form to offset debt. Authorities framed the canal as inseparable from Egypt's national security and sovereignty, underscoring its outsized role in both the domestic economy and international shipping trade.
Beyond the canal, the government pushed back on the entire logic behind shuffling state assets over to the Central Bank, arguing that shifting assets and liabilities between public institutions does nothing to shrink the nation's total debt burden. Officials said genuine progress on public debt requires tackling its structure, servicing costs, and liquidity conditions head-on — not asset transfers that leave overall obligations unchanged.
The controversy traces back to Saturday, when Hassan Heikal, an adviser to the prime minister, floated the idea publicly — proposing that stakes in state-owned firms, or even the Suez Canal itself, could be used to offset domestic debt by shifting the associated liabilities onto the Central Bank. He pointed to a recent debt resolution involving Egypt's National Media Authority — previously known as Maspero — as a template for how such a deal might work.
That precedent is fresh: just Thursday, the government confirmed a settlement clearing 88.3 billion Egyptian pounds ($1.77 billion) that the National Media Authority owed to the National Investment Bank — though officials have not disclosed the settlement's terms or which assets, if any, were involved.
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