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Egypt Cabinet: Suez Canal "Will Not" Be Used to Settle Debt
(MENAFN) Egypt's government on Sunday firmly rejected any use of the Suez Canal or other state assets to pay down government debt, insisting the strategic waterway plays no role in any such arrangement.
The Cabinet's statement came in response to a circulating proposal suggesting certain state assets be transferred to the Central Bank of Egypt in exchange for trimming part of the government's domestic debt. Officials called the idea a "purely personal view" that did not represent government policy, adding that it was "unacceptable and will not happen."
The Cabinet was especially firm regarding the Suez Canal, stating there are no plans to swap, mortgage or transfer ownership of the waterway as a means of offsetting debt. It said the canal is inseparably tied to Egypt's national security and sovereignty, and remains central to both the country's economy and global trade.
The government also dismissed the wider concept of shifting state assets to the Central Bank, arguing that transferring assets and liabilities between public institutions would do nothing to lower the nation's overall debt burden. Instead, it said, public debt must be tackled through its structure, servicing costs, domestic liquidity conditions, and its broader effects on fiscal and monetary policy.
The proposal originated Saturday with Hassan Heikal, an adviser to the prime minister, who suggested Egypt could leverage stakes in state-owned companies — or even the Suez Canal itself — to offset domestic debt by shifting the associated liabilities to the Central Bank. He pointed to a recent debt settlement involving Egypt's National Media Authority, formerly known as Maspero, as a potential template.
On Thursday, the government had announced a deal to settle 88.3 billion Egyptian pounds ($1.77 billion) owed by that authority to the National Investment Bank, though it did not disclose the terms of the agreement or which assets were involved.
The Cabinet's statement came in response to a circulating proposal suggesting certain state assets be transferred to the Central Bank of Egypt in exchange for trimming part of the government's domestic debt. Officials called the idea a "purely personal view" that did not represent government policy, adding that it was "unacceptable and will not happen."
The Cabinet was especially firm regarding the Suez Canal, stating there are no plans to swap, mortgage or transfer ownership of the waterway as a means of offsetting debt. It said the canal is inseparably tied to Egypt's national security and sovereignty, and remains central to both the country's economy and global trade.
The government also dismissed the wider concept of shifting state assets to the Central Bank, arguing that transferring assets and liabilities between public institutions would do nothing to lower the nation's overall debt burden. Instead, it said, public debt must be tackled through its structure, servicing costs, domestic liquidity conditions, and its broader effects on fiscal and monetary policy.
The proposal originated Saturday with Hassan Heikal, an adviser to the prime minister, who suggested Egypt could leverage stakes in state-owned companies — or even the Suez Canal itself — to offset domestic debt by shifting the associated liabilities to the Central Bank. He pointed to a recent debt settlement involving Egypt's National Media Authority, formerly known as Maspero, as a potential template.
On Thursday, the government had announced a deal to settle 88.3 billion Egyptian pounds ($1.77 billion) owed by that authority to the National Investment Bank, though it did not disclose the terms of the agreement or which assets were involved.
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