Egypt is trying to persuade Arab states and banks to buy its military debts to the United States and other Western countries so it can repay them on better terms an Egyptian official said. We want the Arabs to buy the debt and reschedule it at a more reasonable interest rate of up to seven pct the official who asked not to be named tolds. Egypt owes the U.S. 4.5 billion dlrs in military debt and has failed to persuade Washington to reduce interest rates on it averaging about 14 pct. Eqypt also owes France an undisclosed amount estimated by Arab diplomats at over two billion dlrs and has not serviced the debt for over a year. Other military debts are owed to Spain West Germany and Britain. The official said negotiations on the possibility of buying the debt have started with approaches made to Kuwait and Saudi Arabia but no firm decisions have been reached. The official also said the International Monetary Fund (IMF) and Egypt have agreed on certain economic reforms in return for emergency funds. An accord with the IMF would open the way for Cairo to reschedule its 40 billion dlr debt. The official said the IMF agreement requires Egypt to raise energy prices to international levels unify its multi-tiered foreign exchange system and raise interest rates. Egypt will seek loans from various countries immediately after the agreement with the IMF is signed he said. If an Arab country buys part of the military debt or gives us guarantees it will encourage banks to step in he added.
EGYPT SEEKS ARAB FUNDS TO BUY ITS MILITARY DEBTS