(Updates with ban in 16th paragraph and U.S. review of aid in 20th.)
Aug. 19 (Bloomberg) -- A Cairo court ordered ousted President Hosni Mubarak freed from prison, a move that could complicate Egypt’s increasingly violent political transition, while militants in Sinai killed 26 policemen.
The Cairo criminal court’s order to free Mubarak threatens to inject new tensions in a nation convulsed by unrest that has killed almost 1,000 in the past six days. His potential release may spur arguments by the Muslim Brotherhood and others locked in a standoff with the government that the military-installed leaders want to restore the kind of police state Mubarak led.
The military removed Brotherhood-backed President Mohamed Mursi on July 3 following days of rallies against him, a move that has sparked near-daily protests by his backers that have frequently boiled over into deadly clashes. The tumult has made it even more difficult for Egypt to emerge from the slowdown that has battered the economy since Mubarak was toppled.
“No doubt there’s a willingness from some elements of the former regime of Mubarak to come back to the Egyptian political landscape,” said Nasser Amin, director of the Arab Center for the Independence of the Judiciary and the Legal Profession. “This doesn’t mean a return of the police state, those who participated in the Egyptian revolution won’t allow that.”
Mursi has been in military custody since his removal. He was ordered held today for 15 more days pending a probe into new claims he incited violence during deadly unrest in December.
Mubarak, ordered freed in connection with a corruption case, could be released within three days, his attorney, Farid ElDib, said by phone today. He has already been ordered released in connection with two other lawsuits for which he has been jailed, including his role in the deaths of protesters during the 2011 uprising against him. Another case involving gifts from the state-run Ahram group must be decided before he can be freed, Mahmoud el-Hefnawy, an official with the prosecutor general’s office, said by phone.
Mubarak is being retried in the protester deaths case after his life sentence was overturned on appeal.
Youth activists from the group that drove the campaign to oust Mursi said the autocratic leader who ruled Egypt for 29 years won’t be allowed to govern again.
“The fact that we’re fighting the Brotherhood doesn’t mean we’ll allow the return of the Mubarak regime, simply because both regimes are two sides of the same coin,” said Islam Hammam, a leader of the Tamarod group.
The court ruling comes at a difficult time for the government. International censure has mounted since it cleared out two pro-Mursi protest camps in the Cairo area on Aug. 14, touching off a cycle of violence from which the country has yet to emerge. About 900 civilians and 100 policemen have died since the camps were stormed.
In Sinai today, militants armed with rocket-propelled grenades killed 25 policemen near the border with the Gaza Strip. The Interior Ministry, in an e-mailed statement, described the incident as a “continuation of the terrorist crimes in Sinai.”
Another officer was shot dead by a rooftop sniper near the city of al-Arish, the ministry said. The peninsula has grown increasingly lawless since Mubarak was pushed from power, and militants operating there have stepped up their attacks on police and soldiers since Mursi’s overthrow.
Interim President Adly Mansour met with Defense Minister Abdelfatah al-Seesi and Interior Minister Mohamed Ibrahim to discuss the situation in Sinai, the presidency said in a statement.
Hours earlier, at least 36 Muslim Brotherhood members were reported killed during what the Interior Ministry said was an attempt to escape from custody while en route to prison. The cabinet said in a statement that security forces responded after prisoners took a police officer hostage. There was no way to reconcile the reports.
Al-Seesi, who led Mursi’s ouster last month, warned yesterday that the military won’t “remain silent before the destruction of the country.” He also urged Islamists to participate in the government’s plan to steer Egypt toward a civilian democracy.
“By launching the attack just hours after al-Seesi’s speech, in which he promised to end violence in Sinai, the Brotherhood and their allies in Sinai are trying to challenge the army and send a message that they don’t care about his remarks,” said retired army general Sameh Seif el-Yazal.
Brotherhood Ban Considered
The government is currently considering banning the Brotherhood. Hundreds of its members have been detained. Imams who criticize the army or state institutions in their sermons may be suspended, Ahram Gate reported, citing a statement from the ministry of religious endowments.
Egypt’s benchmark stock index extended yesterday’s biggest drop in more than two months. The EGX 30 index fell 0.1 percent at the close in Cairo, taking the two-day decline to 4 percent.
The government’s borrowing costs rebounded from the lowest in more than two years at an auction of treasury bills today, with the average yield on 12-month notes rising 18 basis points 12.86 percent, according to central bank data on Bloomberg.
European Union diplomats met today to discuss a response to the situation, a day after the 28-nation bloc said it would “urgently review” relations with Egypt.
U.S. Aid Review
The U.S. has taken initial steps to withhold economic assistance without cutting off the much larger military aid provided, the New York Times reported, citing officials in President Barack Obama’s administration it didn’t identify. For the year, the administration proposed $250 million in economic assistance and $1.3 billion for the military.
State Department spokeswoman Jen Psaki said today that the U.S. was reviewing aid programs that benefit the Egyptian government.
Deliveries over the next few months of military hardware for Egypt, from AH-64 Apache helicopters to patrol boats, may be delayed or withheld as the U.S. evaluates how to respond to the turmoil there.
The Obama administration put deliveries of five major procurement programs, including F-16 fighter jets by Lockheed Martin Corp., “under review,” according to a State Department document sent to Congress and obtained by Bloomberg News. It was dated July 16, two weeks after Mursi was ousted.
“We’re reviewing all aspects of our relationship,” Defense Secretary Chuck Hagel told reporters today at the Pentagon when asked whether the Apache deliveries will be delayed. Citing U.S. interests in Egypt and the region, he said the U.S. would use its “limited” ability to influence events to encourage an “inclusive, open democratic process.”
--With assistance from Mariam Fam and Ahmed A. Namatalla in Cairo. Editors: Andrew J. Barden, Amy Teibel