EU foreign ministers congratulated Egypt's new president on Monday, calling his
election "a historic moment for the people, the country and the region", and expressed concern at actions by the military that were hindering the handover to civilian rule.
"The EU is seriously concerned about recent developments, in particular the dissolution of the Parliament and the Constitutional Declaration by the Supreme Council of the Armed Forces of 17 June, which delay and hinder the transition and full handover to civilian rule," the ministers said in a statement, issued during a regular meeting in Luxembourg.
Islamist Mohamed Mursi became Egypt's first freely elected president on Sunday and began work on Monday to form a coalition government.
His campaign pledge to complete the revolution that toppled Hosni Mubarak last year will come up against the entrenched interests of the generals who have been in charge of the transition to democracy.
Before the presidential vote, the newly elected Islamist-led parliament was dissolved by the army based on a court order and the generals issued a decree putting limits on the president's remit.
Senior officials in Morsi's Muslim Brotherhood said it had held talks with the army last week on a compromise that would enable the process of building a constitutional democracy to continue.
Egypt's future is important for the European Union, which sees the development of Arab Spring countries as an economic opportunity but also fears the possibility of anti-European governments on the other side of the Mediterranean.
Last year, the bloc introduced a "more for more" policy under which it links economic aid to progress in civil rights and democracy.
The European Union "reiterates the EU's readiness to provide assistance, in close partnership with Egypt's new democratic authorities in coordination with the international community," the ministers said in their statement.
"In this context, the EU underlines the importance for Egypt to engage in the necessary social and economic reforms, to allow the effective use of available international assistance and to improve the business environment," they said.
The EU called for "an inclusive and transparent drafting process of Egypt's new Constitution", which it said should ensure human rights and fundamental freedoms for all, and safeguard the democratic separation of legislative, executive and judicial powers.
(Reporting By Sebastian Moffett; Editing by Tim Pearce)