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United States Department of State / Foreign relations of the United States, 1951. The Near East and Africa
(1951)

Egypt,   pp. 343-444 PDF (39.2 MB)


Page 349


terms of the new agreement are now being drafted and it will probably
be signed by the end of this month or early in April.
   The agreement in principle includes the following points:
   (1) Under the arrangements now concluded, Egrypt and the United
Kingdom mutaally consent to consider £ 80 million as minimum ster-
ling held in the blocked (or Number 2) account at the end of the
period of relea0ses; the remaining £ 150 million of the present holdings
(approximately £ 230 million) in the blocked account will be subject
to release;
   (2) £ 25 million Will be released immediately following the signing
of the agreement; of this sum £ 14 million will be converted into
dollars;
   (3) Thereafter, £ 10 million will be released every year for 9 years
beginning January 1, 1952.
   (4) There will be additional releases commenced in 1951 of £ 5
million per annum up to a total of £ 35 million whenever Egypt's
sterling holdings in the No. 1 account fall below £45 million.
   (5) If at the end of the ten-year period all or part of the £35
million has not been transferred from the Number 2 to the Number
1 account, Great Britain will make annual releases of £ 10 million,
with final release of £ 5 million on July 1, 1963;
   (6) The U.K. undertakes to facilitate the supply of petroleum
products (excluding dollar lubricants) to Egypt against payment
in No. 1 account sterling up to a total of £ 11 million per annum c.i.f.
for 10 years, commencing in 1951.
  It will be noted that the settlement represents considerable con-
cessions by both countries from their respective positions of a month
ago, which were outlined in Cairo Despatch 1766. Under the circum-
stances most favorable to the Egyptians, total releases will be com-
pleted by January 1, 1960; under circumstances least favorable to
Egypt, or in the event of no utilization of the automatic replenish-
ment provision because the No. 1 account total does not fall below
£45 million during the life of the agreement, total releases will be
completed by July 1, 1963. The U.K. Treasury has provided assur-
ances that the £ 80 million, which will remain in the No. 2 account
after all releases have been made, will not be scaled down unilaterally
at any time during the period of the new agreement. Britain also
agrees to initiate discussions on settlement of the sterling remaining
in the blocked account prior to the termination of the agreement.
  Thus, the long-term settlement of the Anglo-Egyptian financial
negotiations may be summarized as follows:
                                                           £ million
Currently blocked sterling (#2 account)                      230
Blocked sterling at end of period covered by agreement        80
Total releases from #2 to #1 accounts during term of agree-
  ment                                                       150
  551-898 0 - 82 - 25
1349
EGYPT


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