Mubarak Hands Power to Egypt's Military
Anti-government demonstrators celebrate in Tahrir Square upon hearing the news of the resignation of Egyptian President Hosni Mubarak on Feb. 2011 in Cairo Photographer: John Moore/Getty Images
Feb. 11 (Bloomberg) -- Ashraf Hegazy, executive director of the Dubai Initiative at Harvard University, talks about the outlook for Egypt's government following the resignation of President Hosni Mubarak. Hegazy, speaking with Tom Keene on Bloomberg Television's "Surveillance Midday," also discusses the outlook for capital flows into Egypt. (Source: Bloomberg)
Feb. 11 (Bloomberg) -- Kenneth Pollack, director of the Brookings Institution's Saban Center for Middle East Policy, discusses Egyptian President Hosni Mubarak's resignation today. Pollack, speaking from Washington with Tom Keene on Bloomberg Television's "Surveillance Midday," also talks about U.S. aid to Egypt and contagion concerns. (Source: Bloomberg)
Feb. 11 (Bloomberg) -- Andrew McGregor, author of "A Military History of Modern Egypt: From the Ottoman Conquest to the Ramadan War," talks about Egyptian President Hosni Mubarak's decision to resign and hand power to the military. McGregor talks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg)
Feb. 11 (Bloomberg) -- Hosni Mubarak stepped down as president of Egypt and handed power to the military, bowing to the demands of protesters who have occupied central Cairo for the past three weeks demanding an end to his 30-year rule. Vice President Omar Suleiman made the announcement in a statement on state television today. Bloomberg's Margaret Brennan and Lara Setrakian report. (Source: Bloomberg)
Hosni Mubarak stepped down as president of Egypt and handed power to the military, bowing to the demands of protesters who have occupied central Cairo for the past 18 days demanding an end to his 30-year rule.
“Mubarak has decided to relinquish the office of the presidency,” said Vice President Omar Suleiman in a statement on state television late today. “He has instructed the Supreme Council of the armed forces to take over the affairs of the country.”
Tens of thousands of protesters who crowded into Cairo’s central Tahrir Square after dark greeted the announcement with a roar of delight before dancing, singing and waving the national flag. The scenes of jubilation were repeated across the country. Outside the presidential palace in Heliopolis, a suburb of the capital, drivers honked their car horns while a crowd of thousands chanted: “The people have toppled the regime.” Egyptians had streamed out of mosques following Friday prayers vowing to oust Mubarak, 82, who yesterday defied calls for him to leave for the second time this month.
“Today the people know the power is in their hands, not with anyone else,” said Shehab Bassam, 30, a graphic designer attending the rally outside the palace. He said one of his friends had been shot dead in front of a police station on Jan. 26, the day after the protests began. “The army’s legitimacy is from the people, therefore we trust that they will help us build a better future.”
Departed Leaders
Mubarak left Cairo for the Egyptian resort town of Sharm El-Sheikh, state television reported today before the announcement. His resignation opens a new phase in a crisis that was sparked by the ouster of Tunisian President Zine El Abidine Ben Ali on Jan. 14 and is rippling through a region that holds more than 50 percent of the world’s oil reserves.
Global stocks rose and oil dropped after the announcement. Oil prices had rallied earlier in the day amid expectations political uncertainty would persist throughout the weekend. March crude oil futures on the New York Mercantile Exchange dropped as much as 1.7 percent to $85.27 a barrel, as of 5:22 p.m. London time.
The Market Vectors Egypt Index ETF, an exchange-traded fund that holds Egyptian shares, rose and the country’s bonds pared losses. The fund gained 6.2 percent in New York, the most since Jan. 31.
Market Reaction
The cost of insuring Egyptian government debt fell 24 basis points to 313, according to CMA prices for credit-default swaps. The contracts were quoted at 379 basis points earlier today.
Egypt’s 5.75 percent dollar bond due 2020 rallied, cutting the yield by 9 basis points at 6.41 percent, data compiled by Bloomberg as of 4:29 p.m. in London show.
“It is a positive step and it will be received positively by the markets but that does not mean that there are no challenges and no hurdles,” John Sfakianakis, the Riyadh-based chief econonist at Banque Saudi Fransi, said in a phone interview. “The reality check will now bite. How will the military rule? Will the people continue to demonstrate and demand Omar Suleiman step down? We have to wait and see.”
The army council, at its highest state of alert since the 1973 war with Israel, is likely to face calls for immediate elections from the thousands of young protesters who have crammed into Tahrir Square and used Facebook and Twitter to organize themselves. Google Inc. executive Wael Ghonim, a figurehead of the protests, earlier today read out a list of demands that included abolishing all restrictions on forming political parties and giving voting rights to Egyptians abroad.
Opposition Leaders
Mohamed ElBaradei, an opposition leader and former head of the United Nations atomic energy agency, said was willing to assist during the period of transition. The Nobel Peace Prize laureate, who spoke in a telephone interview with Al-Jazeera, called the resignation a “dream come true” for the people of Egypt.
Ayman Nour, who ran a distant second in the 2005 presidential race, said he would consider running for president in the future if his Ghad Party approves his candidacy. He was speaking in an interview on Al-Jazeera today.
Elections may also bolster the Muslim Brotherhood, the country’s main opposition group, and other parties shut out of power in the most populous Arab country. The Brotherhood is banned from politics in Egypt, and members have had to run for office as independents in parliamentary elections.
Brotherhood Response
Leading Muslim Brotherhood member Essam El-Erian said it was too early to have a stance on the announcement.
“We need to understand what this means and whether or not this is constitutional,” he said in a telephone interview after the announcement. He declined to comment further.
Mubarak, a former air force general who as president was commander of the largest military force in the Arab world, was the nation’s longest-serving ruler in more than 150 years. He controlled a government that was the linchpin of U.S. policy in the Middle East for three decades.
Mubarak kept peace with Israel, with which Egypt had had formal peace for only two years when he took office, supported U.S. counterterrorism efforts, backed Iranian sanctions over its nuclear program and helped broker Palestinian-Israeli negotiations.
At the same time, Mubarak controlled a regime condemned by the U.S. government for its lack of basic freedoms at home, for its widespread suppression of political opposition and for the torture of Egyptian citizens, which was often carried out with impunity, according to the State Department.
Consequences
“The demonstrators are obviously overjoyed, but the way he resigned may ultimately make them wish they didn’t get what they wished for,” Nathan J. Brown, a professor of political science and international affairs at George Washington University, said in a telephone interview. “They don’t have regime change. They have gotten rid of just one person.”
In downtown Cairo’s Mubarak Station, revelers crossed out the former president’s name, overwriting it to read “Martyrs’ Station.” In Tahrir Square, activists vowed to remain on the streets. “We will celebrate all night long,” said Waleed Rashed, a member of Six of April, one of the youth groups that helped organize the protests.
“We trust the army and we trust that this will be a good step. We hope things will be better. If they are not, we now know the way.”
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