Lebanon is in debt. This is not news. The real news is that for the first time in an extended period that the country is acknowledging that it needs the help of the International Monetary Fund (IMF) in order to draft a “rescue plan” and decide whether to repay its $1.2 billion Eurobond, maturing in March 2020, or not.
As reported by Bloomberg, with the country facing its worst financial crisis in decades, and after months of protests, Parliament Speaker Nabih Berri said Lebanon should form a task force in order to tackle this matter.
“We need to send a message to the world, perhaps to the Americans in particular — given that they’re the most influential and active factor in the International Monetary Fund — stipulating that Lebanon needs the fund’s technical help for a rescue plan,” Berri told Annahar.
Former Prime Minister Saad Hariri, while in his capacity as Caretaker head of government, had requested that both the World Bank and the IMF assist Lebanon in drafting a plan which would address the country’s escalating economic crisis.
Prime Minister Diab argued that the country needs to pay and preserve its reputation in the International community. He has said that Lebanon has never defaulted on its debt and should not start now, in such a fragile situation.
Berri’s comments were published amid mass protests around Beirut near Lebanon’s Parliament building in order to prevent the Vote of Confidence from taking place. It did, however, take place anyway with the approval of 63 lawmakers out of the 84 which were present.
As the session opened, Diab said his government would draft an “emergency plan” before the end of the month aimed at addressing the debt facing the country. He said the plan will be accompanied by a “package” that would require an audit of the Central Bank’s assets.
Diab further insisted his plan includes lower interest rates on treasury bills, as well as on the certificates of deposits that local lenders hold at the central bank.
“Regaining stability in the banking sector requires a series of measures, including boosting banks’ capital by injecting cash liquidity, banks using their reserves, dealing with defaulted loans, restructuring the sector. and banks selling their investments abroad,” he said.