Egypt's leader signs contentious constitution into law

Tamim Elyan
Reuters Middle East

* New constitution enforced, elections due in 2 months

* Egyptians anxious over battered economy, austerity

* Mursi says new basic law is step towards stability

CAIRO, Dec 26 (Reuters) - Egyptian President Mohamed Mursi

has signed into law a new Islamist-drafted constitution he says

will help end political turmoil and allow him to focus on fixing

the fragile economy.

Anxiety about the deepening economic crisis has gripped

Egypt in past weeks, with many people rushing to take out their

savings from banks and the government imposing new restrictions

to reduce capital flight.

Results announced on Tuesday showed Egyptians had approved

the text with an overwhelming 63.8 percent, paving the way for a

parliamentary election in about two months.

The win gives Islamists their third straight electoral

victory since veteran autocrat Hosni Mubarak was toppled in a

2011 revolution, following their earlier wins in parliamentary

and presidential elections.

The presidency said Mursi signed a decree enforcing the

charter late on Tuesday after the official announcement of the

result of a referendum approving the basic law, Egypt's first

constitution since Mubarak's overthrow.

The text has sharpened painful divisions in the Arab world's

most populous nation and prompted often violent protests on the

streets of Cairo.

Opposition groups condemn the new basic law as too Islamist

and undemocratic, saying it could allow clerics to intervene in

the lawmaking process and leave minority groups without proper

legal protection.

But Mursi, catapulted into power by his Islamist allies,

believes adopting the text is key to ending a protracted period

of turmoil and uncertainty that has wrecked the economy.

He argues the constitution offers enough protection to all

groups, saying many Egyptians are fed up with street protests

that have prevented a return to normality and distracted the

government from focusing on the economy.

An atmosphere of crisis has deepened in Egypt since the

vote, with many Egyptians rushing to take out cash from banks

and hoarding hard currency savings at home.

Sharpening people's concerns, the authorities imposed

currency controls to prevent capital flight. Leaving or entering

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

Rocked by often violent protests in the run up to the

two-stage referendum this month, Cairo was calm, with only a

small group of protesters burning tyres overnight.

Mursi's government says its opponents are damaging the

economy 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.

Adding to the government's long list of worries,

Communications Minister Hany Mahmoud resigned from his post

citing his "inability to adapt to the government's working


The United States, which provides billions of dollars a year

in military and other support for 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 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.

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