Egypt Finance Minister Says Resignation Made Point

CAIRO (AP) -- Egypt's finance minister said Wednesday his offer to resign succeeded in sending a message of protest over the military's handling of deadly weekend clashes in Cairo even if the military rulers ultimately refused to allow him to stand down.

Hazem El-Beblawi, who also holds the deputy premiership, explained in a phone interview with The Associated Press that he also did not want what he described as a political statement on his part to negatively impact Egypt's economy, which has failed to recover since the uprising that ousted Hosni Mubarak in February.

El-Beblawi was the first top official to offer to resign after the deaths of 26 people during a protest that turned violent overnight Sunday. The initially peaceful demonstration by minority Coptic Christians in downtown Cairo had been sparked by an attack on a church in southern Egypt.

"I didn't withdraw my resignation," El-Beblawi said. "It was rejected" by the Supreme Military Council, which is ruling Egypt until the election of a civilian government.

"The goal I had by submitting the resignation was to realize an objective and ... that goal was achieved," said El-Beblawi. "I didn't want a decision taken to make a political point to have a negative impact on the Egyptian economy."

El-Beblawi's comments came as the military on Wednesday sought to deflect mounting criticism for the violence and the death toll -- the highest since Mubarak's ouster.

In a televised news conference, a senior military official said troops were attacked by protesters armed with swords, firebombs and rocks. Gen. Adel Emara also denied that troops opened fire or intentionally crushed demonstrators with armored vehicles, as witnesses claimed. Most of those killed were Christians.

The night of violence further stoked concerns of rising sectarian tensions in the country where worries are mounting that Islamists, including extremist Salafis forced into the shadows under Mubarak's regime, were poised for a strong showing in parliamentary elections next month.

El-Beblawi's resignation would have come at a difficult time for Egypt, whose economy has been battered by the protests and strikes that have been staged in virtually every sector since the revolution.

The country's foreign reserves have fallen by more than 30 percent, to about $24 billion, since December while the stock market's benchmark index is down over 42 percent year-to-date.

Meanwhile, key cash cows tourism and foreign direct investment have yet to come close to rebounding to pre-uprising levels, and funding pledged by a host of donor nations, including the oil-rich Gulf Arab states, has yet to materialize.

Egypt is also in talks with the International Monetary Fund to secure a loan, just months after the country rejected a $3 billion loan from the organization, ostensibly because the current government didn't want to saddle its successor with more debt.

In a research note issued Wednesday, Mideast investment bank Beltone Financial said Egypt's short-term outlook is fraught with new challenges. It cited a lack of investments needed to boost weakened economic growth rates, increased unemployment, a widening fiscal deficit and currency pressures, among other challenges.

"These numerous challenges, which Egypt has faced in the past nine months since the 25th of January revolution, will persist into the short-term, and are further exacerbated by pressures emanating from a faltering global economic recovery," Beltone said, projecting GDP growth of 2 percent in fiscal 2011-2012 and 3.1 percent in the following year.

"While the interim government focuses on short-term challenges, the adoption of long-term economic policies are being postponed to a future elected government, deferring a full rebound in economic growth."