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Mubarak Defiance of Ouster Calls Angers Protesters

Egyptian President Hosni Mubarak defied calls for his immediate resignation, agreeing only to delegate powers to his deputy, as thousands crammed into central Cairo demanding an end to his 30-year rule.

Mubarak, 82, reiterated he intends to stay on as president until elections in September while day-to-day powers go to Vice President Omar Suleiman.

President Barack Obama, in a statement issued after Mubarak spoke, said Egyptians were left “unconvinced” that the regime is “serious about a genuine transition to democracy.”

Mubarak’s broadcast announcement was loudly rejected by the tens of thousands of opponents in Tahrir Square in expectation that he was preparing to quit.

“Down with Mubarak,” they chanted, and many waved their shoes in a sign of disrespect.

“I am not happy with this, he didn’t say anything new,” said Ahmed Ali, a demonstrator. “I won’t leave here.”

With Friday prayers approaching, huge new protests were planned. The United Nations says has already resulted in 300 deaths over the past two weeks. Strikes by state workers and others have been spreading.

Protesters braced for the possibility that the military will crack down.

“We are here and willing to give more blood if this is what it takes to get rid of him and his thugs,” Haytham Saqr, 31, one of the protesters at Tahrir, said. “Demonstrations are continuing and plans of escalation are being discussed.”

Opposition leader George Ishak said the Mubarak’s speech was “confused and did not meet the demands of the revolution.”

Egypt Bonds

Egyptian dollar bonds and a fund tracking the nation’s stocks gained as Mubarak pledged to hand authority to Suleiman. The yield on the government’s 5.75 percent dollar bond due 2020 fell 11 basis points to 6.48 percent. The Market Vectors Egypt Index ETF, an exchange-traded fund that holds Egyptian shares, gained 0.5 percent in New York after earlier rising as much as 6.1 percent.

Egyptian bonds are rebounding after yields surged to a record 7.2 percent on Jan. 31 as hundreds of thousands of Egyptians too to the streets demanding Mubarak’s exit. Egypt’s violence has sparked concern that unrest will spread in the region, which holds more than 50 percent of the world’s known oil reserves.

Constitutional Amendments

Mubarak yesterday said he had asked parliament to amend six articles of the constitution and cancel one other. The changes would make it easier to run for president, set term limits on the presidency, and cancel the constitutional authority for anti-terrorism measures such as arbitrary arrest, searches and military tribunals.

Mubarak did not meet the demands of protests to lift Egypt’s Emergency Law, which has been in place without interruption since the assassination of former President Anwar Sadat in 1981. He said, as he has earlier during the protests, that it would be lifted at an unspecified future time when stability returns.

Obama, in his statement, urged the Egyptian government “to move swiftly to explain the changes that have been made, and to spell out in clear and unambiguous language the step by step process that will lead to democracy and the representative government that the Egyptian people seek.”

Mubarak’s address came after the military’s top council gathered in Cairo yesterday to “safeguard the interests” of the nation, sparking speculation about a military takeover. Former UN nuclear agency head Mohamed ElBaradei, who is now an opposition leader, said on Twitter that the army should “intervene immediately to save Egypt.”

Army’s Role

Gamal Fahmy, a journalist and a member of a newly formed alliance between young protesters and opposition figures, called for the army to “clearly side with the people, unseat Hosni Mubarak and oversee a civilian political process.”

For now, the army appears behind Mubarak, at least to the extent that he remains something more than a figurehead president. Mubarak retains the constitutional rights of a president to dissolve parliament and amend the constitution, Adel Quora, former head of the Supreme Judicial Council of Egypt, told state-run television.

Mubarak, who styled himself as a father speaking to his “sons and daughters,” said yesterday that the military will oversee the transition of power between now and September.

“I have declared that I would go on to shoulder my responsibility to protect the constitution and the interests of the people until the power and the responsibility are handed to whoever the voters choose,” Mubarak said in a speech from the presidential palace.

‘It’s Not About Me’

He declared that he would not respond to foreign pressure, suggesting that outside forces were behind some of the unrest. The U.S. and other nations have called on him to quickly take actions to show Egyptians that he and his regime are serious about a political transition.

“It’s not about me. It’s not about Hosni Mubarak,” he said. “But this situaation now is about Egypt, its present, and the future of its citizens.”

For most protesters, it is about Mubarak as both the symbol an embodiment of the heavy state control over life in Egypt.

A leader of the Muslim Brotherhood, the largest opposition group, said Mubarak’s speech wasn’t enough.

“This does not solve the problem,” said Mohamed Saad El- Katatni. “The protests will continue because they ask for the president to step down.”

Crowds in central Cairo refused to heed a call from Suleiman to go home after Mubarak’s speech, which ended shortly before midnight local time. Some left Tahrir Square to surround the nearby building that houses state television and radio channels.

Talks with Opposition

Suleiman, named vice president two weeks ago, has opened talks with opposition groups, including the Muslim Brotherhood. The discussions are the only alternative to the “chaos” of regime change, he said yesterday.

“This is a defining moment, that requires from all the honest people who are keen on the security and stability of Egypt to stand united, be rational and look to the future,” said Suleiman, who previously headed Mubarak’s intelligence service.

The crisis is threatening the outlook for an economy, which has been one of the biggest recipients of U.S. aid since Mubarak came to power. Egypt’s benchmark EGX 30 Index tumbled 16 percent in the week to Jan. 27 and may open on Feb. 13. The country’s central bank intervened in currency markets three days ago to stem a decline in the pound and says it’s ready to do so again.

“The one thing I worry about is a certain amount of capital outflow, especially when the stock market is reopened,” said Mohamed El-Erian, chief executive officer at Pacific Investment Management Co.

Markets Watching

“Markets will closely follow the evolution of the security environment, especially during the protests scheduled” for Friday, said Ann Wyman, the London-based head of emerging markets research at Nomura Holding Inc.

Mubarak has been pushed into repeated concessions by protests that his security forces have failed to suppress. He made Suleiman Egypt’s first vice president in 30 years, dismissed his cabinet and then said neither he nor his son would contest September’s election.

“What he’s been doing in the past two weeks is political striptease,” said Hisham Kassem, an independent publisher and political activist in Cairo. “He was taking off garment after garment and people are saying no. He just isn’t getting it.”