Egypt's contentious constitution becomes law

Egyptian President Mohamed Morsi signed into law a new constitution shaped by his Islamist allies, a bitterly contested document which he insists will help end political turmoil and allow him to focus on fixing the economy. Anxiety about a deepening political and economic crisis has gripped Egypt in past weeks, with many people rushing to buy dollars and withdraw their savings from banks.
The Egyptian pound tumbled on Wednesday to its weakest level against the US currency in almost eight years. The new constitution, which the liberal opposition says betrays Egypt's 2011 revolution by dangerously mixing religion and politics, has polarised the Arab world's most populous nation and prompted occasionally violent protest on the streets.
The presidency said on Wednesday that Morsi had formally approved the constitution the previous evening, shortly after results showed that Egyptians had backed it in a referendum. The text won about 64 percent of the vote, paving the way for a new parliamentary election in about two months.
The charter states that the principles of Shariah, Islamic law, are the main source of legislation and that Islamic authorities will be consulted on Shariah - a source of concern to the Christian minority and others. The referendum result marked yet another electoral victory for the Islamists since veteran autocrat Hosni Mubarak was toppled in 2011, following parliamentary elections last year and the presidential vote that brought Morsi to power this year. Morsi's government, which has accused opponents of damaging the economy by prolonging political upheaval, now faces the tough task of building a broad consensus as it prepares to impose austerity measures.
CRISIS ATMOSPHERE The atmosphere of crisis deepened this week after the Standard & Poor's agency downgraded Egypt's long-term credit rating and warned of a possible further cut. The government has imposed currency restrictions to reduce capital flight.
The pound traded as low as 6.1775 against the dollar on Wednesday, close to its all-time low of 6.26 hit on October 14, 2004, on concerns that the government might devalue or tighten restrictions on currency movements. "All customers are rushing to buy dollars after the downgrading," said a dealer at a Cairo-based bank. "We'll have to wait to see how the market will operate with the US dollar, because as you know there is a rush at the moment." Keen to be seen as decisive, the government is now in talks with business figures, trade unions and other groups to highlight the need for tax increases to resolve the crisis.