The Islamist-dominated upper house of parliament (Shura
Council) holds a meeting under Eqypt's newly-approved
constitution in Cairo. REUTERS/Asmaa Waguih
Egyptian President Mohamed Mursi has signed into law a
new constitution shaped by his Islamist allies, a bitterly
contested document which he said would help end political
turmoil and allow him to focus on fixing the economy.
Anxiety about a deepening political and economic crisis has
gripped Egypt in past weeks, with many people rushing to buy
dollars and withdraw their savings from banks.
The Egyptian pound tumbled to its weakest level against the
U.S. currency in almost eight years.
The new constitution, which the liberal opposition says
betrays Egypt's 2011 revolution by dangerously mixing
religion and politics, has polarised the Arab world's most
populous nation and prompted occasionally violent protest on
In his first address to the nation of 84 million since the
adoption of the new constitution, Mursi said it was time for
all political forces to put aside their differences and start
working together to bring stability.
"I will make all efforts, together with you, to push forward
the economy which faces huge challenges and has great
opportunities to grow," Mursi said in a televised speech.
The presidency announced on Wednesday (local time) that he
had formally approved the constitution the previous evening,
shortly after results showed that Egyptians had backed it in
The text won about 64 percent of the vote, paving the way for
a new parliamentary election in about two months.
The charter states that the principles of sharia, Islamic
law, are the main source of legislation and that Islamic
authorities will be consulted on sharia - a source of concern
to the Christian minority and others.
The referendum result marked yet another electoral victory
for the Islamists since veteran autocrat Hosni Mubarak was
toppled in 2011, following parliamentary elections last year
and the presidential vote that brought Mursi to power this
Mursi's government, which has accused opponents of damaging
the economy by prolonging political upheaval, now faces the
tough task of building a broad consensus as it prepares to
impose austerity measures.
In his speech, Mursi said he would introduce incentives to
make Egypt a more attractive place for investors and
considered making changes in the cabinet as part of his plan.
"The coming days will witness, God willing, the launch of new
projects ... and a package of incentives for investors to
support the Egyptian market and the economy," he said.
The atmosphere of crisis deepened this week after the
Standard & Poor's agency downgraded Egypt's long-term
credit rating and warned of a possible further cut. The
government has imposed currency restrictions to reduce
The pound traded as low as 6.1775 against the dollar on
Wednesday, close to its all-time low of 6.26 hit on Oct. 14,
2004, on concerns that the government might devalue or
tighten restrictions on currency movements.
"All customers are rushing to buy dollars after the
downgrading," said a dealer at a Cairo-based bank. "We'll
have to wait to see how the market will operate with the U.S.
dollar, because as you know there is a rush at the moment."
Keen to be seen as decisive, the government is now in talks
with business figures, trade unions and other groups to
highlight the need for tax increases to resolve the crisis.
Mursi has committed to such austerity measures to receive a
$4.8 billion loan from the International Monetary Fund.
However, Al-Mal newspaper quoted Planning Minister Ashraf
al-Araby as saying the government would not implement the tax
increases until it had completed the dialogue with different
parts of society.
In Cairo's bustling centre, people openly expressed their
frustration with economic instability as they went about
their daily business.
"The country's going to the pits. Everything is a mess,"
Hamdy Hussein, a 61-year-old building janitor, said angrily.
"It's worse than ever. Mubarak was better than now. People
were living and there was security."
Ashraf Mohamed Kamal, 30, added: "The economic situation will
be a mess in the next few years. It already is. People will
get hungrier. People are now begging more."
Mursi, catapulted into power by his Islamist allies this
year, believes adopting the constitution quickly and holding
the vote for a permanent new parliament will help to end the
long period of turmoil and uncertainty that has wrecked the
Mursi's government argues the constitution offers enough
protection to all groups, and that many Egyptians are fed up
with street protests that have prevented a return to
normality and distracted the government from tackling the
The charter gives Egypt's upper house of parliament, which is
dominated by Islamists, full legislative powers until the
vote for a new lower house is held.
While stressing the importance of political stability to heal
the economy, Mursi's government has tried to play down the
economic problems and appealed for unity despite the
"The government calls on the people not to worry about the
country's economy," Parliamentary Affairs Minister Mohamed
Mahsoub told the upper house in a speech. "We are not facing
an economic problem but a political one and it is affecting
the economic situation. We therefore urge all groups,
opponents and brothers, to achieve wide reconciliation and
Mursi is due to address the upper house on Saturday in a
speech likely to be dominated by economic policy.
Sharpening people's concerns, the authorities imposed
currency controls on Tuesday to prevent capital flight.
Leaving or entering Egypt with more than $10,000 in cash is
Adding to the government's long list of worries,
Communications Minister Hany Mahmoud has resigned citing his
"inability to adapt to the government's working culture".
The opposition has condemned the new basic law as too
Islamist, saying it could allow clerics to intervene in the
lawmaking process and leave minority groups without proper
legal protection. It said this month's vote was marred by
Nevertheless, major opposition groups have not called for new
protests, suggesting that weeks of civil unrest over the
constitution may be subsiding now that it has passed.
The United States, which provides $1.3 billion a year in
military aid plus other support to Egypt and sees it as a
pillar of security in the Middle East, called on Egyptian
politicians to bridge divisions and on all sides to reject