UPDATE 3-Egypt approves new constitution drafted by Mursi allies

Yasmine Saleh and Maria Golovnina
Reuters Middle East

* Critics say new constitution is divisive

* People anxious over economy, rush to take out savings

* Opposition says disappointed but no protests planned

* Prime minister says stability is key to economic growth

* U.S. calls for sides to engage, oppose violence

CAIRO, Dec 25 (Reuters) - Egyptian voters overwhelmingly

approved a constitution drafted by President Mohamed Mursi's

allies, results announced on Tuesday showed, proving that

liberals, leftists and Christians have been powerless to halt

the march of Islamists in power.

Final elections commission figures showed the constitution

adopted with 63.8 percent of the vote in the referendum held

over two days this month, giving Mursi's Islamists their third

straight electoral victory since veteran autocrat Hosni Mubarak

was toppled in a 2011 revolution.

Opposition groups had taken to the streets to block what

they see as a move to ram through a charter that mixes politics

and religion dangerously and ignores the rights of minorities.

Mursi says the text - Egypt's first constitution since

Mubarak's fall - offers enough protection for minorities, and

adopting it quickly is necessary to end two years of turmoil and

political uncertainty that has wrecked the economy.

"I hope all national powers will now start working together

now to build a new Egypt," Murad Ali, a senior official in the

Muslim Brotherhood's Freedom and Justice Party, told Reuters.

"I see this as the best constitution in Egypt's history."

In a sign that weeks of unrest have taken a further toll on

the economy, the government ordered new restrictions on foreign

currency apparently designed to prevent capital flight. Leaving

or entering with more than $10,000 cash is now banned.

Two years since waves of unrest broke out across the Middle

East and North Africa - sweeping away long-entrenched rulers in

Tunisia, Libya and Yemen as well as Egypt - well-organised

Islamist parties have emerged as the main beneficiaries.

Urban secularists and liberals who were behind the revolts

complain that their success has been hijacked.

"We need a better constitution," said Khaled Dawood, an

opposition spokesman. "It does not represent all Egyptians."

Mursi's opponents say the new constitution could allow

clerics to intervene in lawmaking, while offering scant

protections to minorities and women. Mursi dismisses those

criticisms, and many Egyptians are fed up with street protest

movements that have prevented a return to normality.

Immediately after the announcement, a small group of

protesters set tyres on fire and blocked traffic near the

central Tahrir square, the cradle of Egypt's uprising, but there

were no immediate signs of violence or major demonstrations.

Washington, which provides billions of dollars a year in

military and other support for Egypt and regards it as a pillar

of security in the Middle East, called on Egyptian politicians

to bridge divisions and on all sides to reject violence.

"President Mursi, as the democratically elected leader of

Egypt, has a special responsibility to move forward in a way

that recognises the urgent need to bridge divisions," State

Department spokesman Patrick Ventrell said. He noted that many

Egyptians had voiced "significant concerns" over the

constitutional process.


The government says its opponents are worsening the economic

crisis by prolonging political upheaval. It has pledged to

impose unpopular tax increases and spending cuts to win a loan

package from the International Monetary Fund.

The ban on travelling with more than $10,000 in cash

followed a pledge by the central bank to take unspecified

measures to protect Egyptian banks. Some Egyptians have begun

withdrawing their savings in fear of more restrictions.

"I am not going to put any more money in the bank and

neither will many of the people I know," said Ayman Osama,

father of two young children.

He said he had taken out the equivalent of about $16,000

from his account this week and planned to withdraw more, adding

that he had also told his wife to buy more gold jewellery.

The "yes" vote paves the way for a parliamentary election in

about two months, setting the stage for another battle between

surging Islamists and their fractious opponents.

The final result, announced by the election commission,

matched - to the last decimal place - an earlier unofficial

tally announced by Mursi's Muslim Brotherhood.

But the opposition said it was disappointed - it had

appealed for the result to be amended to reflect what it

described as major vote violations during the two-round vote.

Officials said there were no violations serious enough to

change the result significantly. "We have seriously investigated

all the complaints," said judge Samir Abu el-Matti of the

Supreme Election Committee. The final turnout was 32.9 percent.


The referendum has sharpened painful divisions in the Arab

world's most populous nation and a growing atmosphere of crisis

has gripped Egypt's polarised society.

Anxiety about the economy deepened this week when Standard

and Poor's cut Egypt's long-term credit rating. Prime Minister

Hisham Kandil told the nation of 83 million on Tuesday the

government was committed to fixing the economy.

"The main goals that the government is working towards now

is plugging the budget deficit, and working on increasing growth

to boost employment rates, curb inflation, and increase the

competitiveness of Egyptian exports," he said.

The referendum follows Islamist victories in parliamentary

and presidential elections, representing a decisive shift in a

country at the heart of the Arab world where Mursi's Muslim

Brotherhood was suppressed for generations by military rulers.

However, secularist and liberal opposition members hope they

can organise better in time for the next parliamentary vote.

Hossam El-Din Ali, a 35-year-old newspaper vendor in central

Cairo, said he agreed the new constitution would help bring some

political stability but like many others he feared the possible

economic austerity measures lying ahead.

"People don't want higher prices. People are upset about

this," he said. "There is recession, things are not moving. But

I am wishing for the best, God willing."

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