Egypt has proposed 18-month reform program to IMF

Three Egyptian dailies said Monday that Cairo was proposing to IMF delegates an 18-month reform program in return for a $12 billion loan over three years to shore up its economy, but that differences remained between the two sides on how to proceed.

The reports by the privately-owned Al-Shorouk, Al-Masry Al-Youm and Al-Watan said the two sides were at odds over the size of a proposed devaluation of the Egyptian pound and the timetable for implementing some of the more politically sensitive reforms, like reducing or removing state subsidies on fuel, electricity and food staples.

According to the papers, the International Monetary Fund has rejected Egyptian requests for a delay or a staggered implementation of some of the proposed reforms.

The IMF's response, according to Al-Masry Al-Youm, was categorical and reflective of Egypt's dire economic situation and the urgency of fixing it. "There is no time left and nothing should be put off," it said quoting, like the other two papers, government sources familiar with the Egypt-IMF talks that started last week in Cairo under tight secrecy.

Egypt is struggling to keep its economy afloat, amid a slump in tourism, foreign currency shortages and double digit inflation and unemployment. The government is also fighting an insurgency in the strategic Sinai Peninsula while continuing to show little tolerance for domestic political dissent. On Monday, the central bank reported a drop by about $2 billion in foreign currency reserves, down to $15.54 billion at the end of July after honoring a number of foreign debt repayments.