Mursi due in Germany on visit shortened by Egypt crisis

President Mohamed Mursi is to leave Egypt's political crisis behind on Wednesday with a short trip to Germany to seek urgently needed foreign investment and convince Europe of his democratic credentials.

But with the Egyptian army chief warning on Tuesday that the state was on the brink of collapse after days of lethal street violence, Mursi cancelled plans to go on to Paris from Berlin and will instead hurry back to Cairo later in the day.

Fifty-two people have been killed in unrest surrounding the two-year anniversary of Egypt's popular revolution, whose values Mursi's critics say he has betrayed.

His supporters say protesters want to overthrow Egypt's first democratically elected leader, who hails from the Muslim Brotherhood that was banned under former President Hosni Mubarak but has come to dominate Egypt since his downfall in 2011.

Mursi on Monday declared a month-long state of emergency in three violence-ridden cities on the Suez Canal - Port Said, Ismailia and Suez, imposing a curfew and allowing soldiers to arrest civilians.

The turmoil eased on Tuesday but the instability has stirred unease in the West about the direction of the Arab world's most populous country, where a currency slump has compounded severe economic problems.

Mursi will be keen to allay those fears when he meets German Chancellor Angela Merkel and powerful industry groups in Berlin.

"TURBULENCE"

"President Mursi is very welcome in Germany," Foreign Minister Guido Westerwelle told Reuters in an interview last week.

"He is the first democratically elected president in the history of Egypt. We all know that a revolution means a lot of turbulence ... Of course we are not happy with everything that has been decided in the last few months in Egypt but it is necessary to seek solutions, increase the dialogue."

Germany has praised Mursi's efforts in mediating a ceasefire between Israel and Palestinians in Gaza, but became concerned at Mursi's efforts last year to expand his powers and fast-track a constitution with an Islamist tint, something that his critics say does not reflect Egypt's communal diversity.

Mursi's vitriolic remarks against Jews and Zionists in 2010, when he was a senior Brotherhood official, disturbed many in Germany, whose Nazi past and strong support of Israel make it highly sensitive to anti-Semitism.

Germany industry leaders see potential in Egypt but are concerned about political instability there.

"At the moment many firms are waiting on political developments and are cautious on any big investments," said Hans Heinrich Driftmann, president of Germany's Chamber of Industry and Commerce (DIHK).

DIHK's Africa expert Steffen Behm said no companies were leaving Egypt but none were newly setting up there either.

Outgoing U.S. Secretary of State Hillary Clinton said in an interview with CNN on Tuesday that any collapse in Egypt would send shock waves across the wider region.

"(But) it cannot in any way be overlooked that there is a large number of Egyptians who are not satisfied with the direction of the economy and the political reform," she said.

"This is not an easy task. It's very difficult going from a closed regime and essentially one-man rule to a democracy that is trying to be born and learn to walk," said Clinton.

"You have to represent all of the people and the people have to believe that ... You have to have a constitution that respects and recognizes the rights of all people and doesn't in any way marginalize any group."

(Additional reporting by Gernot Heller in Berlin and Arshad Mohammed in Washington; Editing by Robin Pomeroy)

(Reuters)