Brussels/Cairo/London – Egyptian and European NGOs call on the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) to stop lending to the Egyptian government. In an open letter to both banks, they express their concern about the current situation [1]. “President Morsi’s undemocratic power grab and the resultant violence run counter to the transition to democracy to which both banks and the European Union are committed”, says Mohamed Mossallem of the Egyptian Initiative for Personal Rights.

On November 22nd, President Morsi gave himself widespread new powers, widely criticised domestically and internationally as a power-grab and “constitutional coup”. Morsi’s decision led to hundreds of thousands of Egyptians protesting across the country and caused street-battles with state security and Muslim Brotherhood supporters in which at least ten people died. Most disturbingly, there are widespread reports of armed Muslim Brotherhood militias and ‘torture chambers’ in which hundreds of protestors were detained, assaulted and coerced into making ‘confessions’—‘confessions’ which Morsi then cited on television.[2]

“Morsi’s increasing control over the state and his violent tactics to suppress the opposition invoke painful memories of Mubarak’s autocratic ruling. The coinciding financial support of international financial institutions serves as a stamp of approval for Morsi’s moves and has enabled a further power grab”, says Philip Rizk of the Popular Campaign to Drop Egypt’s Debt.

The President is aggressively pushing through the Constitution. A process that should be centred around consensus and inclusion has been marred by a Constituent Assembly that ignored all minority, secular and independent voices, widespread voter fraud and intimidation during the referendum and re-empowerment of the military to arrest civilians under a military code of justice.

“Martial law and democracy are not compatible, we want European public banks to understand this and act accordingly. The EU’s close relations with and financial support to Mubarak and other authoritarian regimes were a strategic mistake [3]. If the EU is serious about supporting “deep democracy” and its renewed neighbourhood policy it must avoid repeating its old mistakes and order its banks to step back from supporting this turn to autocracy”, says Mika Minio-Paluello of Platform.

“European development money cannot be seen to be supporting a new Mubarak. A moratorium on lending to Egypt is the only viable solution to comply with EU objectives and allow democratic change to still unfold in the region”, the letter concludes.

Notes for editors

[1] The letters were sent by the Egyptian Initiative for Personal Rights, the Egyptian Center for Economic & Social Rights, the Popular Campaign to Drop Egypt’s Debt, Re:Common (Italy), Platform (England) , Counter Balance (Belgium) and CEE Bankwatch Network (Central & Eastern Europe).
Under the following links you can find the letter to the EIB and the 2012 Egypt EBRD Letter
[3] The EIB has a significant track record of supporting the Mubarak regime, lending nearly €4 billion to Egypt in the decade preceding the Arab Spring