Egypt’s stocks plummet 10% on Morsi acts

Protests against decrees on powers see first death

Egyptian protesters clash with security forces near Tahrir Square in Cairo on Sunday. President Mohammed Morsi’s edicts, which were announced on Thursday and place him above oversight of any kind, including that of the courts, are sparking protests across the country.
Egyptian protesters clash with security forces near Tahrir Square in Cairo on Sunday. President Mohammed Morsi’s edicts, which were announced on Thursday and place him above oversight of any kind, including that of the courts, are sparking protests across the country.

— Egypt’s benchmark stock index plunged by nearly 10 percent Sunday in the first trading session since the country’s Islamist president issued decrees to assume sweeping new powers, while police in central Cairo fired tear gas at protesters who accuse the Egyptian leader of a blatant power grab.

Meanwhile, President Mohammed Morsi’s office said the decrees that extend his powers were “necessary” and temporary and that he will meet with the nation’s judicial council today.

The Egyptian president’s edicts, which were announced Thursday, place him above oversight of any kind, including that of the courts.

The move has thrown Egypt’s already troubled transition to democracy into further turmoil, sparking angry protests across the country to demand the decrees be immediately rescinded.

A teenager was killed and at least 40 people were wounded when a group of anti-Morsi protesters tried to storm the local offices of the political arm of the president’s Muslim Brotherhood in the Nile Delta city of Damanhoor, according to security officials.

It was the first reported death from the street battles that began across much of the nation Friday, the day after Morsi’s decrees were announced. The officials, who spoke on condition of anonymity, identified the boy as 15-year-old Islam Hamdi Abdel-Maqsood.

The tensions also dealt a fresh blow to the economy, which has suffered because of problems that have plagued the Arab world’s most-populous nation since Hosni Mubarak’s ouster.

Egypt’s benchmark EGX30 stock index dropped by 9.59 percent Sunday. The losses were among the biggest since the turbulent days and weeks immediately after Mubarak’s ouster in a popular uprising last year. The loss in the value of shares was estimated at close to $5 billion.

The judiciary, the main target of the edicts, has pushed back, calling the decrees a power grab and an “assault” on the branch’s independence. Judges and prosecutors halted work in many courts in Cairo and other cities Sunday.

But the nation’s highest judicial body, the Supreme Judiciary Council, watered down its opposition to the decrees Sunday. It told judges and prosecutors to return to work and announced that its members would meet with Morsi today to try to persuade him to restrict immunity to major state decisions such as declaring war or martial law or breaking diplomatic relations with foreign nations.

Morsi supporters insist that the measures were necessary to prevent the courts, which already had dissolved the elected lower house of Parliament, from further holding up moves to stability by disbanding the assembly that is writing the new constitution, as judges were considering doing. Both the Parliament and the constitutional assembly are dominated by Islamists. Morsi accuses Mubarak loyalists in the judiciary of seeking to thwart the revolution’s goals and barred the judiciary from disbanding the constitutional assembly or Parliament’s upper house.

Opposition activists, however, have been adamant since the crisis first began that they would not enter a dialogue with Morsi’s regime until he rescinds the decrees.

Critics say the move amounts to a power grab and likened it to the policies of Mubarak’s regime. Others say it is evidence the Brotherhood is looking to cement its hold on power. Morsi now faces the task of defusing a crisis that could mobilize an opposition of secularists and youth groups that have largely been unable to unify since Mubarak’s ouster.

“It’s a fatal mistake,” Khalil el-Anani, a political analyst at the U.K.’s Durham University, said by phone. “Morsi has created a real crisis and a deadlock with no political way out in sight.”

The decrees were “a big blow to the revolution, the transitional period and the democracy Egyptians were hoping to establish that could have dire consequences on the political scene,” he said.

Protesters also clashed with police at Cairo’s Tahrir Square, the birthplace of the mass protests that toppled Mubarak, and in the side streets and avenues that lead off the plaza. The Interior Ministry, which is in charge of the police, said 267 protesters have been arrested and 164 policemen have been injured since the unrest began a week ago, initially to mark the anniversary of street protests a year ago against the nation’s then-military rulers. Forty two protesters were killed in those demonstrations.

The ministry did not say how many protesters were injured in the latest clashes in Tahrir, but security officials put the figure at 260.

Hundreds of protesters who are staging a sit-in in Tahrir have vowed not to leave before Morsi rescinds his decrees. The two sides also have called for rival protests Tuesday in Cairo, signaling a protracted struggle.

Morsi’s office issued an English-language statement late Sunday defending his decrees and repeating the argument he used when addressing supporters Friday outside his Cairo palace - that they were designed to bolster the country’s transition to democratic rule and dismantle Mubarak’s old regime.

“The presidency reiterates the temporary nature of the said measures, which are not meant to concentrate powers,” it said. The statement also pledged Morsi’s commitment to drafting a new constitution.

The presidency said it is committed to engaging “all political forces in the inclusive democratic dialogue to reach common ground” and bridge differences on drafting a new constitution.

Secular and Christian members withdrew from the panel that is drafting the document, saying that the Islamists who dominate the body have hijacked the process to produce a charter with an Islamist slant.

Nader Omran of the Brotherhood’s Freedom and Justice party said any changes to the decrees were “out of the question” but Morsi might “make pledges, vows or addendums explaining his position to clarify the decrees.”

Morsi will hand over his legislative powers to Parliament’s upper chamber once a new constitution is adopted in a nationwide referendum and ahead of parliamentary elections, he said. The presidency did not confirm the claim, but doing so would leave the Egyptian leader with the state’s executive and legislative powers until around April.

Morsi’s decrees drew U.S. criticism Sunday.

Arizona’s John McCain, the ranking Republican on the U.S. Senate Armed Services Committee, said on Fox News Sunday that Morsi’s actions are “unacceptable” and the U.S. should demand that he “renounce the statement” and “allow the judiciary to function.”

“If the judiciary is flawed in some way, then that’s an illness that can be cured over time,” McCain said Sunday. “We thank Mr. Morsi for his efforts in brokering a ceasefire, which by the way is incredibly fragile, but this is not acceptable.”

On NBC’s Meet the Press, Carl Levin, a Michigan Democrat and chairman of the Senate Armed Services Committee, urged caution.

“We don’t obviously want to see a democratically elected autocrat take the place of a undemocratically-elected dictator, which was the case before that,” Levin said, referring to former Egyptian President Mubarak.

Morsi’s move has also caused internal discord inside his own camp, with one aide, Samer Marqous, already resigning to protest the “undemocratic” decree.

Ayman al-Sayyad, another Morsi adviser, wrote on his Twitter account that the president met for the second time Sunday in as many days with his 17-member advisory council and three of his assistants.

“I think it (the meeting) produced a genuine realization of the gravity of the situation. ... We were candid today in our meeting with the president, and we now expect practical steps on the ground.”

He did not elaborate.

Leading Egyptian democracy advocate Mohammed ElBaradei, a Nobel Peace Laureate and a former director of the U.S. nuclear agency, warned Saturday that increasing turmoil could potentially lead the military to step in unless Morsi rescinds his new powers.

Egypt’s liberal and secular groups - long divided, weakened and uncertain as Islamist parties rose to power in the months after the revolution - are seeking to rally in response to the decrees.

Morsi, meanwhile, already has backed down twice in high-profile battles with the judiciary in the 5 months he’s been in office. The U.S.-trained engineer failed to challenge the court ruling that dissolved Parliament’s powerful lower chamber and had to rescind his decision to fire the country’s attorney-general, Mubarak-era appointee Abdel-Maguid Mahmoud, in October. He fired him on Thursday as part of his edicts.

Information for this article was contributed by Hamza Hendawi and Aya Batrawy of The Associated Press; and by Tarek El-Tablawy, Mariam Fam, Salma El Wardany, Abdel Latif Wahba, Kasia Klimasinska, Zaid Sabah Abd Alhamid, Nicole Gaouette, Deema Almashabi, Alaa Shahine, Alessandro Vitelli, Timothy R. Homan and Greg Giroux of Bloomberg News.

Front Section, Pages 1 on 11/26/2012

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