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IPFS News Link • Economy - Economics USA

Money and the Arab Spring


PARIS, May 31 (UPI) -- The Group of Eight summit exposed not only the financial weakness of the old industrial powers when faced with the challenge of the Arab Spring but also the crisis in its Middle Eastern alliances that is forcing the United States to choose between its immediate interests and its values.

On the face of it, all seemed generosity as the G8 leaders announced that some $20 billion would be available over the next three years to support new democratic governments of North Africa. However, the money won't come directly from the indebted G8 members but from international institutions like the World Bank and the European Investment Bank. And the small print of who was to pay for what and how was left vague.

This sounds like serious money but the International Monetary Fund estimates that eight times as much -- some $160 billion -- is needed as the fledgling new governments in Egypt and Tunisia grapple with a collapse of their tourist trade, strikes and soaring food and import prices. Egypt's bread subsidies, which the government cannot afford but dare not remove, could alone swallow the money that G8 mentioned.