Egypt unrest: Public-sector pay rise but protests go on

John Simpson meets Mubarak supporters at some of Egypt's tourist attractions

Egypt is increasing pay and pensions for public-sector workers by 15% as protesters defy attempts to return the country to normality.

Banks have re-opened, but the stock exchange will not resume trading until Sunday 13 February and the Egyptian pound has fallen to a six-year low.

The government put up $2.2bn of short-term debt up for auction to inject money into the battered economy.

Thousands of protesters have stayed in Cairo's Tahrir Square for a 14th day.

They say they will only leave when President Hosni Mubarak stands down.

Economic woes

The Egyptian cabinet - reshuffled on 31 January, when President Mubarak sacked several ministers - met in its new form for the first time on Monday afternoon and agreed to raise public-sector salaries and pensions by 15%.

Finance Minister Samir Radwan allocated about 6.5bn Egyptian pounds (£677m; $960m) to cover the increases for six million employees.

Analysis

The Obama administration is still watching to see if the Egyptian Government is serious about change. So far, they are not convinced. Their end game hasn't altered.

What US policymakers want amounts to the current Egyptian government's pro-Western policy, plus democratic legitimacy, plus stability. They believe for that to happen, peace on the streets is essential and serious negotiations about the path to elections are vital.

They haven't changed their mind about Mr Mubarak: they would still like him to go sooner than September. They just accept that this may not happen.

The Egyptian government auctioned off $2.2bn (£1.55bn) in short-term debt, having cancelled a previous auction last week. It is seeking to revive an economy said to be losing at least $310m a day.

However, the Cairo stock exchange, which was originally supposed to re-open on Monday, will now not resume trading until Sunday 13 February. It has been closed since 27 January, when 70bn Egyptian pounds (£7.3bn; $12bn) was wiped off shares over two days.

Schools remain closed, and a curfew is still in force in Cairo, Alexandria and Suez. However, the hours of curfew - which has been widely flouted - have been relaxed. It now runs from 2000 to 0600 local time (1800-0400 GMT).

US-based pressure group Human Rights Watch (HRW) has told the BBC it has confirmed 297 deaths during the protests since 28 January.

The figure was based on visits to five hospitals in Cairo, two in Alexandria and one in Suez, HRW's Egyt researcher Heba Morayef said. However, she said she had received reports of more deaths in other towns but had not yet been able to confirm them.

"The actual death toll will be much, much higher, I'm sure of that," Ms Morayef said.

Google marketing executive and pro-democracy activist Wael Ghonim, missing since 28 January, has been freed, Google said.

"Huge relief - Wael Ghonim has been released. Huge love to him and his family," Google said on the micro-blogging site Twitter.

Undated photo of Google executive Wael Ghonim Wael Ghonim, a prominent activist, has been released after 11 days' detention

Mr Ghonim gave an emotional interview to the privately owned Dream TV channel in which he described his 12 days of imprisonment.

He said he was interrogated but not tortured or mistreated. He was kept in a cell and blindfolded, without knowing what was going on outside. His parents, wife and friends knew nothing about what had happened to him, he said.

He confirmed he was behind the Facebook page credited with sparking the demonstrations.

When he was shown pictures of protesters who had died, he broke down in tears and left the studio.

Negotiations

US President Barack Obama hailed the negotiations which took place on Sunday between the government and the protesters.

"Obviously, Egypt has to negotiate a path and they're making progress," he said after a speech at the US Chamber of Commerce.

The Obama administration has previously said efforts to force Mr Mubarak's resignation could trigger elections before opposition groups were fully ready to participate.

Leading businessman Naguib Sawiris is calling on the protesters to accept that Mr Mubarak will remain in office until the next elections, in September.

Mr Sawiris, who played a key role in establishing a committee of "wise men" to negotiate with Vice-President Omar Suleiman, said the differences on the timing of President's Mubarak's departure were a stumbling block in the negotiations.

In a BBC interview he said a big segment of the country - including the army - did not want to see the president, a war hero, humiliated.

The president's legitimacy was now broken, he said, but there was no mechanism yet for the interim period.

Meanwhile, Germany has announced it will not export any more arms to Egypt until further notice.

The German economy ministry says it is acting over concerns about Egypt's human rights record. Last year, Germany sold 22 million euros' (£18.5m; $30m) worth of arms to Egypt.

Export permits already granted are to be re-investigated, the ministry said in a statement.

Nato Secretary General Anders Fogh Rasmussen warned that the protests in Egypt and the Arab world could fuel illegal immigration to Europe.

"Instability in the region as such may also, in the longer-term perspective, have a negative impact on the economies, which might lead to illegal immigration in Europe," Mr Rasmussen told a news briefing in Brussels.

However, the situation did not pose a direct threat to Nato, he added.

In a separate development, one Egyptian security officer was injured when four rocket-propelled grenades were fired at a security forces barracks in Rafah on the Gaza Strip border, officials said.

It was not immediately clear who was behind Monday morning's attack, which Egyptian state television blamed on "extremist groups aiming to undermine security".

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