Negotiations Ongoing with US to Drop Egypt's Debt

Egypt is continuing to negotiate with the United States over a debt swap programme, Minister of Planning and International Cooperation Ashraf El-Arabi has said. Egypt aims to convince the US to swap foreign debt for assets, and to drop over $1 billion in "odious" debt, the minister explained.

El-Arabi dismissed reports that negotiations with the US to drop Egypt's public debt had been halted following the Egyptian government's request to postpone a $4.8 billion loan agreement with the IMF earlier in December. "We are very close to reaching an agreement with the US on dropping $450 million worth of debt. However, our counterparts are inclined to tie this agreement to the success of the IMF loan deal," El-Arabi told Al-Ahram's Arabic website.

"The debt swap programme will also aim to substitute $550 million of sovereign debt for developmental projects," explained El-Arabi. A ministry source noted that a US delegation would visit Egypt soon in order to negotiate terms of the proposed debt swap programme and audit Egypt's overall public debt. Egypt had previously sealed agreements with three European countries – France, Germany and Italy – pertaining to the implementation of similar debt swap programmes.