Cairo: Egypt’s military-appointed interim leader was sworn in with the challenge of healing a polarized nation, as authorities moved against Muslim Brotherhood officials and Islamists, including ousted President Mohamed Morsi.

Egypt’s incoming leadership is taking action on two fronts after removing Morsi a year into his first term as the country’s first democratically elected civilian president. His exit followed four days of mass protests in Cairo and across the country.

The military says it’s determined to bring about national reconciliation. Even so, orders to arrest the Brotherhood’s two top officials and the placing of Morsi and 15 Islamist leaders under travel bans, as reported by the state-run Ahram Gate website, were likely to be seen by his backers as a settling of scores that could upend stability efforts.

The new president, Adly Mansour, 67, promoted just days earlier to chief justice of the Supreme Constitutional Court, inherits stewardship of a nation that’s suffering a sluggish economy, and with a political system back to where it was two years ago, after the revolt that pushed Hosni Mubarak from power. Morsi, who appointed the defense chief who ultimately announced his ouster late on Wednesday, had also promoted Mansour on 1 July.

The greatest thing accomplished on 30 June is that it has united all of the people, without differentiation or discrimination, Mansour said at his inauguration in Cairo on Thursday, referring to the first of several days of rallies that paved the way for Morsi’s ouster.

Judicial Battles

The veteran judge, deputy to the head of the constitutional court since 1992, spoke in the same chamber where Morsi was sworn in a year ago. Even before taking his oath in 2012, Morsi and the justices locked horns in battles that left his Islamist backers complaining about a judiciary they said was biased against them.

The travel bans issued against Morsi and the other Islamists were linked to allegations of insulting the judiciary, Ahram Gate said. In addition, orders for the arrest of the Brotherhood’s supreme guide, Mohammed Badie, and the group’s powerful deputy chief, Khairat el-Shater, were issued, South Cairo prosecution official Ahmed Ezz el-Din said by phone. The state-run Middle East News Agency reported that the former supreme guide, Mahdy Akef, had been detained.

Both Badie and el-Shater, who was initially fielded for the presidency only to have the bid scuttled, were widely seen by Morsi’s critics as the real power behind the presidency.

The military’s moves against the Islamists, though, harked back to the repeated crackdowns the group endured under successive Egyptian presidents—pressure that was released only after Mubarak’s ouster opened the door for their move from prison to the president’s office.

30 June

Mansour’s repeated references to 30 June in his speech acknowledged the importance of protests that day that ultimately led to what Morsi on Wednesday termed a military coup. Pointing to the country’s poor economic performance, protesters said they sought to take back control of a 2011 uprising they argue was subverted by Morsi and his attempt to cement the Muslim Brotherhood’s power.

Standing in front of a group of opposition and religious figures late on Wednesday, defense minister Abdelfatah al-Seesi said Morsi’s response failed to meet and conform with the demands of the people. That forced them to act after a 48-hour ultimatum had passed, which they did in consultations without excluding anyone, he said.

Al-Seesi said a civilian government will be convened, the Islamist-drafted charter suspended and early elections held.

We totally reject excluding any party, particularly political Islamic groups, the National Salvation Front, a bloc that opposed Morsi, said in an e-mailed statement. We stress that the achievement the Egyptian people made lately, obliges us to reconcile with all parties, and to confirm that the priority now is to remain united while facing serious challenges.

‘Greater Expectations’

If the Morsi administration came in with high expectations, the new interim government and the subsequent elected government will not only face even greater expectations, but also a large disgruntled segment, Raza Agha, chief Middle East and Africa economist at VTB Capital Plc in London, said in an e-mailed report. Events since the ouster of Mubarak have shown that managing these expectations is equally important.

Egypt’s economy is in worse shape than it was during Mubarak’s last days in office. With growth near the weakest in two decades, unemployment stands at a record 13.2%. A bid for a $4.8 billion International Monetary Fund loan has yet to be accepted, Instead, the country has been relying on deposits and other aid, predominantly from Qatar.

The yield on Egypt’s 5.75% bonds due in April 2020 tumbled 149 basis points, or 1.49 percentage points, the most since the notes were sold in 2010, to 9.28% at 5:07 p.m. in Cairo, data compiled by Bloomberg show. The EGX 30 Index of stocks rallied 7.3 %, the biggest jump in more than a year.

Celebratory Fireworks

For Morsi’s critics, the ouster offered a chance of a new beginning. Millions nationwide erupted in celebration, with fireworks illuminating the sky over Cairo’s Tahrir Square and by the presidential palace. Roars of frustration came from a separate rally in the capital from Morsi’s supporters who said a democratically elected leader was robbed of an office won through the ballot box last year.

This is not about performance, Muslim Brotherhood spokesman Gehad El-Haddad said. This is about a military coup and a retaliation from the old regime.

The National Salvation Front rejected that view.

What Egypt is witnessing now is not a military coup by any standards, it said. It was a necessary decision that the armed forces’ leadership took to protect democracy, maintain the country’s unity and integrity, restore stability and get back on track.

Eleven people were killed and 516 injured in clashes after the army issued its statement, the Health Ministry said.

We will probably see the Islamist reaction divided in two: some Islamists who will resort to violence, but also Islamists who are going to think that they’ve played the long game for eight decades, and will think strategically about elections that they can win again, said Hani Sabra, Middle East director at the Eurasia Group in New York. Bloomberg.

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