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Egypt

Kerry pledges aid to Egypt after Morsi assurances on IMF

US Secretary of State John Kerry has offered more US aid to Egypt to help revive its economy during talks with President Mohammed Morsi. Unrest has continued in Port Said, with two civilians and two policemen killed.

Kerry finished his two day visit to Cairo Sunday by holding what he called a "candid and constructive" meeting with Egypt's Islamist President Mohammed Morsi.

"It is clear that more hard work and compromise will be required to restore unity, political stability and economic health to Egypt," Kerry told Morsi, whose tenure since his election last June has been marred by constitutional wrangles and protest.

In Port Said on Sunday night two civilians and two policemen were killed as protesters and security forces clashed. The unrest began after authorities decided to remove from the city 39 detainees awaiting a verdict over alleged involvement in a deadly soccer match in Port Said in February last year.

That verdict is due next Saturday. Last year's football riot left dead 74 people, mostly supporters of a visiting Cairo team. In January, a Cairo court passed death sentences on 21 other defendants, mostly from Port Said.

Aid to follow reforms

During his talks with Morsi, Kerry pledged $250 million (192 million euros) as the first part of a larger package of aid to Egypt, acknowledging the country's "extreme needs." The country has been struggling with a dip in currency reserves, a soaring budget deficit and an economy that has generally been slow to recover following the 2011 revolution.

"The United States will now provide the first $190 million of our pledged $450 million in budget support funds," Kerry said, adding that Washington has also pledged an additional $60 million for a new joint Egyptian-American Enterprise Fund.

Egypt will get the aid after "Morsi's assurance that he plans to complete the IMF process," Kerry said, referring to a $4.8 billion loan Egypt is currently negotiating with the International Monetary Fund. The loan was agreed in principle last November but was suspended at Egypt's request due to violent street protests the following month.

The release of the rest of the $450 million and the other $550 million tranche of the $1 billion in US aid that President Obama promised last year will be tied to what US officials see as successful reforms within the country.

Kerry said the separate $60 million in aid will be for a new fund for "direct support of key engines of democratic change." The top US diplomat added that the funding for that program could rise to $300 million over time.

Politically divided

After arriving from Turkey on Saturday, Kerry met with political figures, business leaders and representatives of outside groups, saying he heard their "deep concern about the political course of their country, the need to strengthen human rights protections, justice and the rule of law, and their fundamental anxiety about the economic future of Egypt."

Kerry also spoke with opposition figure Mohamed ElBaradei on Saturday by telephone. ElBaradei and opposition figure Hamdeen Sabahi had refused to meet him in person.

Egypt has seen months of political unrest, with the country deeply divided between Morsi's mainly Islamist allies and opposition groups that say the president has failed to meet the goals of the revolution. Morsi has been criticized for following in the footsteps of Mubarak, not carrying out reforms and trying to install a more religiously conservative government.

The country is due to hold parliamentary elections in April, but liberal and secular opposition groups have said they will boycott the poll. Kerry called the vote "a particularly critical step" in Egypt's democratic transition.

As Kerry left Egypt Sunday, protesters and security forces clashed in Cairo's Tahrir Square, the epicenter of the 2011 revolution. Protesters also blocked to the road to the capital city's airport, delaying Kerry's departure by a half hour until Security forces pushed them to another street.

dr, ipj/rc (AP, AFP, Reuters, dpa)