CAIRO // The Egyptian president, Hosni Mubarak, yesterday approved a 15 per cent pay rise for six million government employees.
The move comes after the regime failed to make progress in landmark talks with Islamists, and with opposition leaders continuing to demand that he leave office immediately.
The decision, made during the first full meeting of Mr Mubarak's newly formed cabinet, appeared to be an attempt to shore up his support base and defuse popular anger as tens of thousands of anti-regime protesters remain barricaded in Tahrir Square demanding that he end his 30-year presidency.
Announcing the pay rises, the newly appointed finance minister Samir Radwan said about 6.5 billion Egyptian pounds (Dh4bn) would be allocated to cover the salary and pension increases, which would take effect in April.
Public-sector employees have been a pillar of support for the regime, but their salaries have stagnated in value in recent years as prices have soared, forcing the government to periodically announce raises to quell dissatisfaction.
Mr Mubarak has also ordered the country's parliament and its highest appellate court to enforce lower-court rulings disqualifying hundreds of ruling party politicians from office for campaign and ballot irregularities. The rulings were ignored by electoral officials, and enforcing them may pave the way for new elections.
The ruling National Democratic Party (NDP) won more than 83 per cent of the 518 seats in last year's parliamentary elections, which were widely condemned as rigged.
EGYPT'S TWO WEEKS OF TURMOIL
The regime appears confident in its ability, for the moment at least, to ride out the unprecedented storm of unrest, but it has made a number of moves in response to protesters' demands.
The Egyptian vice-president, Omar Suleiman, met several major opposition groups including the outlawed Muslim Brotherhood for the first time on Sunday, and offered new concessions including freedom of the press, the release of those detained during the protests and the eventual lifting of the country's hated emergency laws.
Opposition figures reported little progress in the talks.
Judicial officials also promised to start the questioning today of three former ministers and a senior ruling party official accused of corruption, after they were dismissed by Mr Mubarak last week. The cabinet reshuffle was intended to placate protesters by removing some of the most hated officials in the government.
The former tourism minister, Zuhair Garanah, will be questioned along with the former ministers of housing and trade. The country's top prosecutor has imposed a travel ban on the former interior minister, Habib al Adli, and frozen his bank account.
Mr Mubarak's gestures have done little so far to persuade the masses occupying the city-centre square to end their two-week protest, which may have claimed at least 300 lives, according to the UN, leaving the two sides in an uneasy stalemate.
"We don't trust him … he's made many promises in the past," said Salih Abdel Aziz, an engineer with a public-sector company. "He could raise salaries by 65 per cent and we wouldn't believe him. As long as Mubarak is in charge, then all of these are brittle decisions that can break at any moment."
Keen to get traffic moving again around Tahrir Square, the army tried early yesterday to squeeze the area that the protesters have occupied, but overnight campers rushed out of their tents to surround soldiers attempting to corral them.
Wary of the army's effort to gain ground, dozens of protesters had slept inside the tracks of the army vehicles. The powerful army's role in the next weeks is considered critical to the future of Egypt.
"The army is getting restless, and so are the protesters. The army wants to squeeze us into a small circle in the middle of the square to get the traffic moving again," said another protester, Mohammed Shalaby, 27.
A curfew in Cairo, Alexandra and Suez was also shortened yesterday to between 8pm and 6am, cutting the restriction by an hour.
Egypt's government tried to get the country back to normal when the working week began on Sunday. Banks reopened after a week-long closure with queues of customers accessing accounts, but the hours, and withdrawals, were limited. Schools remained closed.
Many Egyptians, including those who took part in nationwide demonstrations last week, are keen to get back to work and are worried about the effects of the crisis on stability, the economy and the important tourism sector.
For the 82-year-old Mr Mubarak, there has also been scant relief in western capitals, where he was once hailed as a close ally and bulwark of Middle East stability.
The US president Barack Obama said yesterday that Egypt had changed for ever since its street revolt broke out on January 25, although he stopped short of urging Mr Mubarak to quit immediately.
"Egypt is not going to go back to what it was," Mr Obama said in an interview on US television. "The Egyptian people want freedom, they want free and fair elections, they want a representative government, they want a responsive government."
While Mr Mubarak had been a "good partner" for the US in keeping peace with Israel and on antiterrorism, the time was "now" for a new government, Mr Obama said.
He would not predict whether Mr Mubarak would step down, saying "only he knows what he's going to do".
* with reporting by agencies