On Tuesday, Egypt’s interim government named a new prime minister, Hazem el-Beblawi, an economist who served briefly as the interim military government’s finance minister after former president Hosni Mubarak was toppled in February 2011. Beblawi is a good choice, insofar as he seems to understand that one of Egypt’s core economic problems is that the government cannot afford to subsidize so many goods, from vital foodstuffs like bread and cooking oil to fuel.

“We must create a clear understanding for the public that the level of subsidies in Egypt is unsustainable, and the situation is critical,” said Beblawi. “The canceling of subsidies requires sacrifices from the public and therefore necessitates their acceptance.”

That’s the sort of language likely to appeal to the IMF, which held up a $4.8 billion aid package to Egypt because the government of Mohamed Morsi was unable to implement the necessary reform measures, like slashing subsidies. However, if Beblawi has identified the key issue, it’s worth pointing out that he made these comments in an interview before Morsi was ousted last week, and before he was tapped to become prime minister. When he assumes office, he is likely to find that practice is very different from theory.

Many Egyptians like their subsidies and do not want to see them cut no matter how critical the situation may seem to a man with a PhD from the University of Grenoble like Beblawi. Without subsidies it would be hard to get by with the salaries from low-paying lifetime jobs in the public sector that many Egyptian college graduates expect their government to provide for them. Without subsidies, it is virtually impossible to live on the less than $2 a day on which 40 percent of Egypt subsists.

Thus, advocating on behalf of a heavily subsidized Egypt and against austerity measures, will be the young revolutionaries of the Tamarrod movement camped out in Tahrir Square. There are very few cries for slashing subsidies or economic liberalization among the protestors, for the fact is that this component of the opposition typically characterized as liberal does not believe in liberal economic policies.

Beblawi’s problem is that, from the perspective of Egyptian officials, the Tahrir activists have already toppled two Egyptian leaders—first president-for-life Hosni Mubarak and then the country’s first freely elected leader. If you take on the populist demagogues at Tahrir, your chances of winning are not good.

In other words, cracks are already starting to show in the ruling coalition. There likely won’t be any direct confrontation just yet, for Beblawi has a grace period carved out by the billions of dollars in loans and donations that the Gulf states, led by Saudi Arabia’s $5 billion, have pledged to Egypt. Egyptians will be able to enjoy the rest of their month-long Ramadan season in peace—except for the storm clouds gathering over the horizon, in Sinai.

Yesterday it was reported that Hamas attacked Egyptian soldiers in the Sinai, killing three, while Egyptian security forces arrested another 150 Hamas operatives. Other Gaza-based Islamist groups are also reportedly headed to the Sinai, where they’ve attacked several Egyptian army posts. In addition, there are also Sinai-based jihadist groups, some apparently affiliated with al Qaeda, who are looking to target Egyptian soldiers. Reportedly, all of these groups are acting in concert with the Muslim Brotherhood in Cairo, as part of its struggle with a military that humiliated it by removing Morsi from power and arresting its leaders.

The Brotherhood called for an uprising in the aftermath of a protest Monday at the military barracks where Morsi is allegedly being held. The confrontation left at least forty pro-Morsi activists dead with hundreds more wounded. The army contends that they were protecting themselves when an armed terrorist group charged soldiers, and the Brotherhood claims that the army opened fire on unarmed protestors, but in the end, the chronology, or who started what is immaterial. In toppling Egypt’s first freely elected president on behalf of one segment of Egyptian society, the army took sides against the other part that did not want to see Morsi pushed out of the presidential palace. Perhaps more dangerously for Egypt, the army’s action to oust Morsi has united what his presidency divided—the Islamists.

The Muslim Brotherhood clearly shares the same worldview as Hamas and the Sinai-based jihadists. And yet for reasons of national interest and self-interest, the Morsi government was compelled to take positions against both. Under Morsi, the army not only closed smuggling tunnels that channeled weapons to both Hamas and the Sinai groups, with strategic Iranian missiles going to the former; it also sided with the White House and Israel during the IDF’s fall campaign, Operation Pillar of Defense, against Hamas. All that is changed now, and minor tactical differences are forgotten for the sake of unity in a larger project—to resist the American/Zionist project to oppress authentic Muslims, a project implemented by its paid henchmen, the Egyptian army.

The immediate question is what does the plan of battle look like? The Brotherhood has little hope of defeating the army in a direct confrontation on the streets of Cairo and other cities, but together with its allies it can bleed the army in the Sinai for a long time to come. Most troubling is the concern that the Brotherhood and it allies might try to embroil the army in skirmishes with Israel along the Sinai border that might turn more deadly. The hope then is that this nascent Islamist coalition falls apart while Egypt’s ruling coalition unifies around a political and economic program to get the country back on its feet. Or at least that the Islamist alliance breaks down before the ruling alliance starts to show its cracks.

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