The Egyptian parliament reconvened on Tuesday in defiance of the country’s highest court and military rulers who dissolved the legislature last month after a third of the parliamentary elections that took place between November and January were ruled illegitimate.

Newly-elected Egyptian president Mohamed Morsi urged parliament to reconvene last Sunday. His Muslim Brotherhood is the largest party.

Egypt’s supreme court said on Monday that its decision was final and binding. It hears challenges to the presidential decree’s constitutionality today. The army has not moved to prevent lawmakers from entering the parliament building.

The dispute is part of a broader power struggle between the generals, who seek to maintain their privileges and status, and the Brotherhood which was repressed during the military dictatorship of former president Hosni Mubarak and his predecessors.

Asia Times Online‘s Spengler columnist, David P. Goldman, points out that there is an important financial aspect to this rivalry.

Since the revolution, the Egyptian government has run high deficits while the country’s foreign exchange reserves are nearly depleted. Saudi Arabia has provided emergency loans to the country’s interim military rulers but if the Muslim Brotherhood usurps power, the kingdom, which abhors the Islamist group and supported the opposition Salafist al-Nour Party in the elections, will almost certainly pull the plug.

It is not clear, moreover, whether Saudi generosity can stabilize Egypt even under the best of circumstances. With its trade deficit running at $3 billion a month and other sources of revenue much reduced, the country’s annual financing needs probably exceed $20 billion. Egypt is the world’s largest importer of wheat and depends on imports for half its caloric consumption.

Egypt could restrict fuel imports in an attempt to curtail its trade deficit but gasoline has been in chronic short supply for the past year. Shortages appear to be getting worse.

The Brotherhood, which initially benefited from Mubarak’s ouster, claiming more than 40 percent of the seats in the freely elected parliament, appear to be losing support as Egypt’s economy remains in shambles.

Morsi won just a quarter of the vote in the first round of the presidential election and picked up little more support in absolute numbers in the second round. Millions of Egyptians who had turned out to elect a parliament did not participate in the presidential runoff which pitted Morsi against former prime minister and military man Ahmed Shafik.