With Lebanon’s current unemployment rate at 30%, and the escalating financial crisis surprising us with more pain each and every day, the government has officially stated on February 6th, 2020, that it has approved a rescue plan.
The plan is intended to pull the country from its worst economic and financial crisis in decades. Now, all it has to do is win the vote of confidence from the Parliament.
A draft policy statement reported on by Reuters earlier in the week outlined broad plans, including “reducing interest rates, recapitalizing banks, restructuring the public sector, and seeking support from foreign donors.”
On the day of its approval, Lebanon’s Minister of Information had said that the Cabinet had approved the plan with minor changes.
It was not made clear what changes were made to the seventeen-page statement, which is expected to be presented next week to Parliament for the government to secure a vote of confidence.
The cabinet of Prime Minister Hassan Diab was formed last month with the support of Hezbollah, its political allies. They also happen to hold a Parliamentary majority.
Hassan Diab’s Cabinet faces the most difficult financial reality the country has witnessed in decades – dealing with everything from no confidence in banks to a weakened Lebanese pound and soaring inflation.
The government must currently decide the manner through which to approach the maturing sovereign bond repayments, including a $1.2 billion Eurobond maturing in March 2020.
Protesters currently maintain their anger over youth unemployment and the poor quality and delivery of public services, such as water and electricity. Even the internet’s safety was in question for a while.
Lebanon has one of the world’s highest debt-to-GDP ratios. Politicians and Economists alike have said that it is very difficult to see how the near-bankrupt country could repay its creditors, regain the people’s trust, as well as save a now completely struggling banking sector.
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