Administration planning $1 billion debt relief for Egypt

by Mary Beth Sheridan

The Obama administration has decided to provide about $1 billion in debt relief for Egypt, a senior official said Saturday, in the boldest U.S. effort yet to shore up a key Middle East ally as it attempts a democratic transition.
The aid would be part of a major economic aid package that also includes trade and investment incentives, officials said. It is intended to help stabilize Egypt after demonstrations forced out longtime President Hosni Mubarak on Feb. 11.
While the Obama administration has been preoccupied of late with the war in Libya and protests in Syria, it sees Egypt as even more critical for U.S. interests. Washington has long regarded Egypt as a moderating influence in the Middle East. With one-quarter of the world’s Arabs, Egypt could emerge as a democratic model in the region — or, if its revolution fails, a locus of instability or extremism.