Secretary of State John Kerry acknowledged a “deterioration” in Egyptian freedoms in testimony to the House Foreign Affairs Committee Thursday, but defended the administration’s decision to waive human rights conditions on aid to the country. “There are disturbing arrests, there are disturbing sentences,” he said, but also pointed to Egypt’s strategic importance to the United States, the competition among global players for influence in Cairo and the difficult security environment there. “We’ve got a huge interest in making sure that Egypt doesn’t go down into a more difficult status than it is,” said Kerry. “There is a major challenge of extremism, bombs that have been going off in Cairo, bombs that have gone off in Sharm al-Sheikh, different challenges.” On Wednesday, he told the Senate Appropriations Committee, “We have to try to work and thread a needle carefully that can balance the various interests that exist.” Kerry offered two reasons explaining the administration’s shift on Egypt over the past few years. The first had to do with regional influence. He pointed out that while the United States allocated $1.3 billion in military aid and $150 million in economic aid for Cairo every year, Saudi Arabia and the United Arab Emirates have channeled over $20 billion into Egypt in the last few years. “Let me ask you who has leverage, who are they going to listen to, where do they think their help is coming from,” Kerry said. The second reason had to do with the viral spread of violence and extremism in a borderless world, and the way in which radical groups in Syria can mobilize disaffected young people in places like San Bernardino, California. That environment argues for doing everything possible to address failed and failing states and for promoting stability, Kerry said.  Senator Lindsey Graham (R-SC) agreed with Kerry, saying “the nightmare of all nightmares is if Egypt fails, and it is complicated.” Senator Patrick Leahy (D-VT) however, worried that Egypt’s leaders were taking “some of the same steps that created their problems in the past. [CNN, 2/26/2016]

COURTS

Health Minister sues Doctors Syndicate
Health Minister Ahmed Rady is suing the Doctors Syndicate to overturn a series of resolutions they passed during an extraordinary general assembly meeting earlier this month, calling their decisions invalid and unlawful. Over 10,000 doctors turned up for the February 12 meeting and voted in favor of 18 resolutions, including demanding the removal of the Health Minister and referring him to the syndicate’s disciplinary committee. The Doctors Syndicate detailed the minister’s lawsuit in a statement released Thursday. Rady reportedly claimed the syndicate has no power to remove him from the ministry, as this is a political process that must follow certain legal procedures. The doctors had also voted in favor of the right to conditionally refrain from working until medical facilities are secured. In his lawsuit, Rady said this would violate the doctors’ sworn oath to provide services to any patient in need.The minister further accused the syndicate of inciting doctors to strike, a criminal offense that puts patients’ lives at risk. Rady also stated that the demand to refer officers implicated in the Matariya case to a criminal court is unlawful, as it represents an infringement on prosecutorial authority. [Mada Masr, 2/25/2016]

ECONOMY

Egypt’s Central Bank allows mortgage firms to lend to poor, medium income housing
The Central Bank of Egypt (CBE) will for the first time allow mortgage companies to provide financing for home buyers in order to ease the burden on existing lenders and expand the base of beneficiaries, the bank said in a statement. CBE Governor Tarek Amer said Wednesday that the Housing Ministry signed loans worth EGP 10 billion ($1.3 billion) with Egyptian banks to finance the construction of 450,000 units. The CBE also added two new tiers of interest rates to accommodate more borrowers. Low-income earners will now be offered an interest rate of 5 percent, down from 7 percent, and upper-middle income earners will be offered a rate of 10.5 percent. The CBE said the changes will encourage banks to grant financing to middle-income homeowners. [Ahram Online, DNE, 2/25/2016]

Also of Interest

• Egypt’s fuel subsidies drop 42 percent in first half of fiscal year | Ahram Online
• Orascom Telecom asks Beltone subsidiary to complete purchase of CI Capital | Reuters, DNE
• Oil services supplier Subsea 7 wins contract from BP off Egypt | Reuters
• Eni unveils new successful exploration activities in Egypt | Reuters
• Egypt to issue international tender for oil, gas drilling | Amwal Al Ghad

SOCIETY & MEDIA

Two protesters killed during clashes with police in Damietta
Two protesters were shot dead Friday in Damietta after clashing with riot police, the Ministry of Interior said. Another protester was injured and two policemen also sustained injuries. The demonstration reportedly began after Friday prayers, but the protesters were confronted by police before the protest could gain momentum. Police claim the protesters were armed and exchanged fire with security forces. The Ministry of Interior claimed that the two protesters, al-Sayed Abu al-Maaty and Mohamed al-Badawi, were “members of the terrorist group, the Muslim Brotherhood.” The injured policemen are employees of National Security Apparatus and the Investigation Bureau of Damietta. Heavily armed security forces were deployed to Damietta following the clashes, in anticipation of more protests. [DNE, AMAY (Arabic), 2/23/2016]

Egyptian intellectuals, Culture Minister campaign against jailing of novelist
Egyptian writers, artists and filmmakers have launched a public campaign for greater freedom of creativity and expression following the jailing of a novelist on charges of violating “public modesty” through his writing. The campaign, in solidarity with author Ahmed Naji, launched Thursday a series of video messages from intellectuals in support of creative freedom. In the first video, well-known Egyptian scriptwriter Medhat al-Adl said the sentence against novelist Ahmed Naji came as an “extreme shock” to writers and artists, and expressed concern for the future of art in Egypt. “If this is how it is, my published novels contain things that would put me in prison too,” said best-selling author Alaa al-Aswany, adding that he has signed petitions, along with hundreds from the field, requesting Naji be freed. The growing movement by Egyptian intellectuals protesting the cases also includes Culture Minister Helmy al-Namnam and two former culture ministers, members of the committee that wrote Egypt’s current constitution, and the Egyptian Publishers Association. Culture Minister Helmy al-Namnam attended a conference Thursday supporting Naji, the third conference held to discuss the novelist’s sentence in as many days. Namnam said that laws conflicting with constitutional guarantees for the freedom of expression need to be confronted, explaining that the case sets a precedent extending far beyond Naji’s novel. It was not Naji that harmed public morality, Namnam argued, but whoever filed the lawsuit against him. Thursday’s conference was held at the Journalists Syndicate and brought together nine rights organizations as well as several public figures. [AP, Mada Masr, 2/25/2016]

Also of Interest

• Egyptian doctor convicted of FGM loses license | Egypt Independent

SECURITY

Two car bombs defused in a Giza street
Three residential buildings in Giza were evacuated early on Friday after security forces received reports of explosives in the area and defused bombs in two nearby cars, security sources told state run Al-Ahram.  The two cars were primed to explode by a road in the Faisal area, the sources said. Major General Ahmed Aboul-Enein, an expert at the explosives department, said that the two devices had been connected using an electric heater. [Ahram Online, Cairo Post, 2/26/2016]

INTERNATIONAL

Turkish Foreign Minister says does not mind holding bilateral talks with Egypt
Turkish Foreign Minister Mevlut Cavusoglu told Turkish state media on Thursday that Egypt’s participation in the upcoming Islamic Conference should be perceived as participation in an international event and not a bilateral meeting between Egypt and Turkey. However, he said Turkey does not mind holding those bilateral talks. “We meet many Egyptians officials in international forums,” he said. Cavusoglu also said Egypt’s role is important for the entire region but due to its internal situation it is not able to meet its expected role. This week, Ankara also welcomed Cairo’s participation in an international working group to resolve the crisis in Libya. This follows reports that Turkish President Recep Tayyip Erdogan has authorized renewing contacts with Egypt at the ministerial level. [DNE, VOA, 2/26/2016]

Egypt’s new ambassador to Israel officially holds office after three-year gap
The new Egyptian ambassador to Israel was welcomed on Thursday at the President’s House in Tel Aviv as the Israeli president received his diplomatic credentials, according to a statement by the Israeli Ministry of Foreign Affairs. Ambassador Hazem Khairat’s appointment marks the end of a three-year period during which there had not been an Egyptian Ambassador in Israel. In November 2012, former president Mohamed Morsi recalled Cairo’s ambassador to Israel over an Israeli attack on the Gaza Strip that left hundreds, including civilians, killed and wounded, according to a UN investigative panel. Egypt appointed Ambassador Khairat for the position in June; however, he officially assumed office on Thursday. He previously held the positions of Ambassador to Chile and Syria. Israeli President Reuven Rivlin welcomed the new ambassador and wished him success in his new role. “The peace agreement between our countries is an international treaty and it is for both us, a top priority. We may not agree on everything, but we respect each other and because of this we will build a shared future,” President Revlin said. Ambassador Khairat expressed his appreciation of the president’s welcome and stated the need to take responsibility for “the benefit of those who live in the region.” [Aswat Masriya, 2/26/2016]

Also of Interest

• Egypt’s Sisi arrives in Kazakhstan to start Asian tour | Ahram Online, AMAY, SIS, Cairo Post, EGYNews (Arabic)
• Cairo secures release of 13 Egyptian sailors from Yemen | Ahram Online
• AUC remembers Giulio Regeni, protests university’s position on his murder | Mada Masr
• Italian killing highlights assault on academic freedom in Egypt | Reuters
• Dinner with Israel’s ambassador earns ‘anti-Zionist’ Egyptian MP Okasha criticism | Ahram Online, Cairo Post